$(35$ pts$)$ Fordham corporation is evaluating the proposed acquisition of a new milling machine. The machine's base price is $$108,000,$ and it would cost another $$22,000$ to modify it for special use by Fordham corporation. The machine falls into the MACRS $5-$year class, and it would be sold after $5$ years for $$15,000.$ The machine would require an increase in net working capital $($inventory$)$ of $$7,500.$ The milling machine would increase the annual revenues by $$40,000$ and is expected to save the firm $$12,000$ per year in before$-$tax operating costs, mainly labor. Fordham corporation's marginal tax rate is $30\%.$

If the appropriate discount rate is $15\%,$ should the machine be purchased?

$[$The depreciation rates for the five years are $20\%,32\%,20\%,11\%,$ and $11\%]$