$4$

$7\mathrm{.}14$

points

Your firm is contemplating the purchase of a new $$555,000$ computer$-$based order entry system. The system will be depreciated straight$-$line to zero over its five$-$year life. It will be worth $$77,000$ at the end of that time. You will be able to reduce working capital by $$102,000($this is a one$-$time reduction$).$ The tax rate is $24$ percent and the required return on the project is $12$ percent.

If the pretax cost savings are $$150,000$ per year, what is the NPV of this project? $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete and correct.

$\backslash$table$[[$NPV$,$$$,29,304\mathrm{.}01$

$4$

round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

$7\mathrm{.}14$

points

Will you accept or reject the project?

Accept

Reject

If the pretax cost savings are $$115,000$ per year, what is the NPV of this project? $($A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.

$\backslash$table$[[$NPV$,$$$116,806\mathrm{.}81$