Specialized production equipment is purchased for $125,000. The equipment qualifies as a 5-year MARS-GDS depreciation schedule. Net before tax cash flows are expected to be $50,000 increasing by $7,000 for each year for 7 years, and a market value of $30,000 is estimated at the end of year 7. If the federal tax rate is 32% and the state tax rate is 6%, should you approve the project?

Work by hand WITHOUT USING EXCEL. Thorough explanation, please!