KGO Litho is planning to purchase a new printing press. The acquisition cost is $164,000. The estimated cash flows (in thousands of dollars) are as follows:
| Year |
0 |
1 |
2 |
3 |
4 |
5 |
| Cash flow |
-164 |
40 |
40 |
40 |
40 |
40 |
The salvage value of the press at the end of year 5 is expected to be $10,000. Should the press be acquired if the cost of capital is 12 percent?