A company that sells has proposed to a small public utility company that it purchase a small electronics computer for 1,000,000 to replace ten calculating machines and their operators. An annual service maintenance contract for the computer will be provided at a cost of 100, 000 per year. One operator will be required at a salary of 110, 000 per year and one programmer at a salary of 160, 000. The estimated economical life of the computer is 10 years. The calculating machines costs 8,000 each when new, 5 years ago, and presently can be sold for 2,000 each. They have an estimated life of 8 years and an expected ultimate trade in value of 1, 000 each. Each calculating machine operator receives 85, 000 per year. Fringe Benefits for all labour cost 8% of annual salary. Annual maintenance cost on the calculating machine has been 500 each. Taxes and insurance on all equipment is 2% of the first cost per year. If capital costs the company about 25%, would you recommend the computer installation?.