Jessie's Tech Store is making renovations by installing new equipment. The renovations will generate Jessie's store $4000 of additional revenue per year at a cost of $8040, with no additional costs. The purchase and installation take place on January 1. The equipment has no scrap value and a useful life of 5 years. Jessie's Tech Store's cost of capital is 12% and uses straight line depreciation. The tax rate is 50%.

What is the present value of the new equipment? If Jessie's Tech Store has a required IRR greater than 20% for the investments it makes, would you advise that it make this investment? Why or why not?