The modern Age Copier Company is considering purchasing a copier for use by customers.Data for the copier under consideration is reflected below.

The copier is expected to last 8 years.

The tax rate is 30%.

The Company will not accept a project with a return of less than 12%

Copier equipment cost $64,000

Annual Revenue $80,000

Annual paper cost $33,100

Annual maintenance cost $20,000

Annual depreciation $8,000

All of the itemsin the table above are taxable or tax deductibleexcept for the initial cost of the copier Equipment.Although the initial cost is not tax deductible, the initial cost will be subject to depreciation. Assume straight line depreciation with no residual value.

1.ShouldModern Age Copier undertake this project?Explain and support with analysis.

2.Compute the Payback period (Round to one decimal place) Show analysis.