Please show all work and equations used.

You consider purchasing a new computing system, including networking, for your sales force for $112,000. The system has a 6-year useful life and no salvage value. Your sales force is expected to generate an additional $37,000 of net income before taxes and depreciation each year by using this upgraded system. The combined federal and state income tax rate = 40%. Annual inflation = 4%.

a. Fill in the following table assuming MACRS depreciation rates

Year	Pretax income	Depreciation	Taxable income	Tax owed	After tax income	Inflation adjustment factor	Real after tax income
1	$37,000	$22,400				(1.04)-1
2	$37,000
3	$37,000
4	$37,000
5	$37,000
6	$37,000

b. If your MARR = 15%, should you purchase this system based on your real after-tax income? Why or why not?