Water Cutter Co. is considering purchasing a system to assist in water jet manufacturing. The system costs $200,000. It has an expected life of 7 years, at which time its salvage value will be $9,500. Operating and maintenance expenses are estimated to be $20,000 per year. If the system is purchased, additional revenues will be $40,000 per year. Water Cutter Co. must borrow half of the purchase price. The bank has agreed to three equal annual payments, with the first payment due at the end of year 1. The loan interest rate is 16% compounded annually. Water Cutter Co.'s MARR is 15% compounded annually. 1. Calculate the loan payment amount. 2. Calculate the present worth of the investment. 3. Based on the present worth you calculated, should Water Cutter Co. purchase the system? Why or why not