A) COMPANY-YES GOVT-YES

B) COMPANY-YES; GOVT-NO

C) INDETERMINATE

D) COMPANY-NO; GOVT-NO

E) COMPANY-NO; GOVT-YES

Flying Aces has a cost-plus-fixed fee contract with the air force to build jets. The government will buy any additional equipment that it needs on a justified cost-savings basis. The incremental tax rate for the company is 35%. The company has computed the following labor savings for a new equipment that costs $45000: Period Period 2 $25,000 Before Tax After Tax 16,250$16,250 The company has an after-tax time value of money of 6% and the federal government has a before-tax time value of money of 5%. Should the equipment be purchased