A Plastic manufacturer has under consideration the proposal ofproduction of high quality plastic glasees. The necessary equipmentto manufacture the glasses would cost Rs 80,000. The productionequipment would last five years with no salvage value. The glassescan be sold at Rs 3/- each. Regardless of level of production, themanufacturer will incur cash cost of Rs 27,000 each year. Thevariable cost is estimated at Rs 2.0 per glass. The manufacturerestimates it will sell about 75000 glasses per year, the straightline method for depreciation will be used; the ordinary tax rate is55%. Should the proposed equipment be purchased? Assume cost ofcapital is 12%.