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You have been asked by the president of your company to evaluate the proposed acquisition of a new spectrometer for the firms R&D department. The equipments basic price is $70,000 and it would cost another $15,000 to modify it for special use by your firm. The spectrometer, which has a MACRS 3-year recovery period, would be sold after 3 years for $30,000. Use of the equipment would require an increase in net working capital (spare parts inventory) of $4,000. The spectrometer would have no effect on revenues, but it is expected to save the firm $25,000 per year in before-tax operating costs, mainly labor. The firms marginal tax rate is 40 percent. If the projects cost of capital is 10 percent, should the spectrometer be purchased?