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2. World Cellfone Co. is considering the purchase of a new telecommunications system for $60 million. This system will boost the firms productivity so that its operating earnings will increase by $12 million per year over the next 8 years. World Cellfone Co. corporate tax rate is 35% and its debt and equity costs are 7% and 14%, respectively. The manufacturer of the telecommunications system is willing to loan the firm $25 million for the purchase at a subsidized rate of 5% (with World Cellfone Co. putting up the remainder from its retained earnings account). The loan principal is to be paid off in 5 equal installments over 5 years with interest being paid every year on the loan outstanding. If the firms required rate of return under all-equity financing is 10%, should it go ahead with the purchase? (Assume that the depreciation amount from the project will be exactly offset by the increase in capital expenditure.)