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Management of Group R Corporation is considering an expansion inthe company’s product line that requires the purchase of anadditional $185,000 in equipment with installation cost of $15,000and removal expense of $5,000. The equipment and installation costswill be depreciated over five years using straight-linedepreciation method. The expansion is expected to increase earningsbefore depreciation and taxes as follows: Year 1 $60,000 Year 2$60,000 Year 3 $75,000 Year 4 $75,000 Year 5 $50,000 Group RCorporation’s income tax rate is 20 percent, and the weightedaverage cost of capital is 10 percent. Because of uncertainty inthe market, the company’s financial analyst predicts that thelikelihood that the worst-case scenario happening is 20%; and thelikelihood of the best-case scenario occurring is 30%. Based uponthe net present value method of capital budgeting should managementundertake this project?