The Summit Petroleum Corporation will purchase an asset that qualifies for three$-$year MACRS depreciation. The cost is $$160,000$ and

the asset will provide the following stream of earnings before depreciation and taxes for the next four years: Use Table $12-12.$

The firm is in a $35$ percent tax bracket and has an $8$ percent cost of capital. Use Appendix B for an approximate answer but calculate

your final answer using the formula and financial calculator methods.

a$.$ Calculate the net present value.

Note: Do not round intermediate calculations and round your answer to $2$ decimal places.

Net present value

b$.$ Under the net present value method, should Summit Petroleum Corporation purchase the asset?

Yes

No