Thoma Pharmaceutical Company may buy DNA testing equipment costing $$60,000.$ This equipment is expected to reduce labor costs of clinical staff by $$20,000$ annually. The equipment has a useful life of five years but falls in the three$-$year property class for cost recovery $($depreciation$)$ purposes. No salvage value is expected at the end. The corporate tax rate for Thoma is $38$ percent $($combined federal and state$),$ and its required rate of return is $15$ percent. $($If profits after taxes on the project are negative in any year, the firm will offset the loss against other firm income for that year.$)$ On the basis of this information, what is the net present value of the project? Is it acceptable?

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