2. Nova Corp. is considering purchasing a new crop harvesting machine. The new machine will be more efficient. There will be a reduction in costs as a result of lower amounts of damage to the crops that are harvested. The new equipment costs \(\$ 275,000\) and will require shipping and delivery costs of \(\$ 4,500\) as well as installation costs of \(\$ 5,500\). Management has estimated that the additional production will increase sales revenues \(\$ 170,000\) per year however, operating costs will increase by \(\$ 60,000\) as well. The damage to the crops as a result of the harvesting will decrease by \(\$ 10,000\) per year. The harvesting equipment belongs to a CCA class that has a \(25\%\) CCA rate. The new equipment has a useful life of 4 years after which it can be salvaged for \(\$ 120,000\). If the new equipment is purchased, the company will require an increase of \(\$ 18,000\) in cash and an increase of \(\$ 8,500\) in inventory. To finance part of the investment in current assets, accounts payable will have to increase by \(\$ 5,500\). All investments in net working capital will be fully recovered at the end of the useful life. The additional increase in the market size was revealed by a marketing survey that was completed one year ago. Nova Corp. needs to pay the marketing firm \(\$ 5,000\) for the market survey. Assume the company has a cost of capital \(12\%\) and a \(40\%\) tax rate. Based on NPV analysis, should the project be accepted? (20 points)