Assume a computer was purchased yesterday by Arnold Company for $$2,000$ cash. Today, it is announced that a similar computer can be purchased for $$1,800.$ The newest computer will save the company $$50$ per year in operational expenses compared to the computer purchased yesterday. If the new computer is purchased, the maintenance contract with the seller will be increased from $$20$ to $$40$ per year.

Each computer has a useful life of five years. They will have no resale value at the end of their useful lives. The old computer will be immediately put into storage and sold for $$1,200$ in one year$$s time.

The company$$s discount rate is $6\%$ per year. Its income tax rate is $30\%.$ Income taxes only apply to operational and maintenance expenses. Assume operational, maintenance, and income tax expenses are paid at the end of each year.

Required: Determine if the new computer should be purchased. State any additional assumptions you make.