4. TerpCo, Inc., is considering the purchase of a new machine that will cost $150,000. The machine has an estimated useful life of three years. Assume for simplicity that the equipment will be fully depreciated for tax purposes, 30%, 40%, and 30% in each of the three years, respectively. The new machine will have a $10,000 resale value at the end of the estimated useful life. The machine is expected to save the company $85,000 per year in operating expenses. TerpCo uses a 40% estimate income tax rate and a 16% hurdle rate to evaluate capital projects. TerpCo has asked us to determine whether it should accept this project.