The president of Blue, Inc. has hired you, a capital budgeting expert, to evaluate the proposed acquisition of a new computer. The computers price is $40,000 and there will be another $2,000 for shipping and installation. The computer has a three year useful life and no salvage value. Purchase of the computer would require an increase in inventory of $2,000 and increase in current liabilities of $2,000. The computer would increase the firms before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 3 years and then sold for $15,000. The firms marginal tax rate is 30%, and the projects cost of capital is 14%. Red, Inc., uses both straight line and MACRS depreciation to evaluate the project. MACRS 3-year class (33%, 45%, 15%, 7%). Should Blue purchase the new computer? What is the present value of the tax shield (MACRS versus straight-line)? You must support your answer.