CHAPTER 14: INFLATION AND PRICE CHANGE 2. A small research device can be purchased for $50.000 and depreciated by MACRS (checlk the property class). The net benefits from the device, before deducting depreciation, are $7,000 at the end of the first year and increasing $3,500 after that (second year equals $10,500, third year equals $14,000, etc.) until the device is hauled to the junkyard at the end of seven years. During the seven-year period, there will be an inflation rate () of390. The profitable corporation has a 25% combined federal and state income tax rate. If it requires a real 1 5% after-tax rate of return on its investment, should the device be purchased