A firm can purchase new equipment for a $150,000 that generates an annual after-tax cash inflow of $44,400 for four years.

Answer the following questions:

1. If the firm has cost of capital of 10%, report the net present value of this project.

2. Explain whether the firm should accept this project.

3. If the cost of capital decreases to 8%, should the firm accept the project? Explain why or why not.