preko is considering purchasing a robotic system at a cost of 250000, there will be additional costs for installation and modification totalling 14000, use of the system will reduce annual labour costs of 200000 by 25%, product defects will also be reduced, saving the company 18000 per year, preko will need to increase net operating working capital by 5000. the company has decided that the robot can be located in a part of the factory that is currently underutilized and is undergoing a 20000 upgrade for a seperate project. the robotic system has an expected life of 6 years, at which time it will have a salvage value fo 40000. preko mechanical has a weighted average cost of capital of 13%. the applicable corporate tax rate is 35% and cca rate is 20%, the company will be financing the system with a 6 year bank loan with annual year end payments of 57000, ( consisting of both interest and principle)

Determine if Preko Mechanicfal should purchase this equipment.