Propulsion Labs will acquire new equipment that falls under the five-year MACRS category. The cost is $300,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years:

Year 1

$

110,000

Year 2

120,000

Year 3

75,000

Year 4

50,000

Year 5

56,000

Year 6

33,000

The firm is in a 35 percent tax bracket and has a 13 percent cost of capital.

(a)	Calculate the net present value. (Negative amounts should be indicated by a minus sign. Round "PV Factor", "Percentage depreciation" to 3 decimal places, intermediate and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Net present value

$

(b)

Under the net present value method, should Propulsion Labs purchase the equipment asset?

	Yes
	No