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4. The research and development division of a large corporation is considering the purchase of a new tunneling X-ray microscope for $320,125. The projected net
4. The research and development division of a large corporation is considering the purchase of a new tunneling X-ray microscope for $320,125. The projected net benefits from gains in materials engineering is projected to be S125,000 in today's real dollars for the first year, increasing by an arithmetic gradient of S17,500 per year in real dollars for years 2 to 4. The unit will be depreciated under MACRS. Due to increasing advances in tunneling X-ray microscope technology, the unit will have $50,000 market value in today's real dollars at the end of the 4 year project life. During the 4 year analysis period, inflation is expected to be steady at 2.8% per year. The corporation has a combined state and federal income tax rate of40.0%. The corporation requires a 15.0% after-tax market rate of return on its research and development investments. Should the X-ray uni be purchased
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