Usfan Company is interested in purchasing a computer with uncertain life. The following table describes its expected life and resale value:
Expected life

Probability

Resale value

3 years

20%

$20,000

4 years

30%

$10,000

5 years

50%

$5,000

The computer will save company $40,000 annually while it is running. Usfan will depreciate it fully on the straightline basis in three years. The tax rate of Usfan is 30%, and proper discount rate in this case is 12%. The cost of computer is $90,000. Should Usfan buy it?