A corporation is considering buying a medium-sized computer that will eliminate a task that must be performed

Question:

A corporation is considering buying a medium-sized computer that will eliminate a task that must be performed three shifts per day, 7 days per week, except for one 8-hour shift per week when the operation is shut down for maintenance. At present four people are needed to perform the day and night tasks. Thus the computer will replace four employees. Each employee costs the company $32,000 per year ($24,000 in direct wages plus $8000 per year in other company employee costs). It will cost $18,000 pe year to maintain and operate the computer. The computer will be depreciated by sum-of-years -digits depreciation using a 6-year depreciable life, at which time it will be assumed to have zero salvage value. The corporation has a combined federal and state incremental tax rate of 50%. If the firm wants a 15% rate of return, after considering both state and federal income taxes, how much can it afford to pay for the computer?

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...