2. Pharma Inc. has just been awarded approval for a vaccine that cures a virus that is affecting the population. After having already spent $250,000 in research and development expense in order to develop the vaccine, Pharma Inc. is preparing for mass distribution of the vaccine. This will require the purchase of additional machinery today for $110,000. Depreciation expense on the machine will be calculated on a straight-line basis over its 2 year life and no salvage value. Pharma expects they will be able to sell 1,000 vaccines in the first year, and 2,000 in the second year at a selling price of $100 per vaccine. Variable production costs are expected to equal 10% of total revenue. Despite there being no salvage value in the calculation of depreciation expense for the new machinery, Pharma actually believe they will be able to sell it at the end of year 2 for $10,000. Assume a tax rate of 20% and cost of capital for this project of 12%. Should Pharma Inc. proceed with the mass distribution of the vaccine? [10 points]