Manju is considering buying a needed piece of equipment for her personal business. She may purchase the equipment for $16,000. Manju will depreciate the equipment based on a useful life of 5 years using the SL method for tax purposes (no salvage value). Manju plans to sell the equipment after 4 years. Manju thinks she can then sell the equipment for $3,200. Manju estimates that the equipment would generate an additional $8,200 contribution margin per year for 4 years. Manju will incur maintenance and other upkeep costs on the equipment of $2,400 per year. Also, at the end of the third year, major repair costs of $3,600 will be incurred. Manju pays a marginal 30% federal, state, and local income tax rate on her income. Using the net-present-value technique, evaluate whether Manju should purchase the equipment. 1. Assume Manju desires an after-tax return of (a) 12 %. (b) 8%. Assume the initial outflow for the equipment occurs at the beginning of the asset's life. but that all other flows occur at the end of the period. 2. Also, compute the payback period for the project.