A small research device is purchased for $10,000 and depreciated

A small research device is purchased for $10,000 and depreciated by MACRS depreciation. The net benefits from the device, before deducting depreciation, are $2000 at the end of the first year and increasing $1000 per year after that (second year equals $3000, third year equals $4000, etc.), until the device is hauled to the junkyard at the end of 7 years. During the 7-year period there is an inflation rate f of 7%. This profitable corporation has a 50% combined federal and state income tax rate. If it requires a 12% after-tax rate of return on its investment, after taking inflation into account, should the device have been purchased?

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...
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...