Scenario 2 Reliable Corp. has been offered a seven-year contract to supply a part fo The annual pre-tax cash flow from the contract is expected to be $90,000 In order to take on the contract and manufacture the part, Reliable would purchase new manufacturing equipment for $300,000. In addition, it woul $50,000 in working capital to invest in new inventory. It is not expected that the contract would be extended beyond the initial c The company's after-tax cost of capital is 10%, and its tax rate is 30%. At the end of the contract, the salvage value of the manufacturing equipm $10,000. The present value of the capital cost allowance (CCA) tax shield equipment is $64,432 and the present value of the tax shield on the salva year of disposition would be $2,250. Assume initial outlays occur immediately and that annual cash flows occ the period. Quantitatively, determine whether or not the contract should be accepted