5. Franks is looking at a new computer system with an installed cost of $460,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the computer system can be scrapped for $55,000. The system will save the firm $155,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $29,000. If the tax rate is 21 percent and the discount rate is 10 percent, what is the NPV of this project? 6. Your firm is contemplating the purchase of a new $485.000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $35,000 at the end of that time. You will save $140,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $60,000 (this is a one-time reduction). If the tax rate is 24 percent and required return is 12%, would you accept the project? 8. Project X involves a new type of graphite composite in-line skate wheel. We think we can sell 6,000 units per year at a price of $1,000 each. Variable costs will run about $400 per unit, and the product should have a four-year life. Fixed costs for the project will run S450,000 per year. Further. we will need to invest a total of $1,250,000 in manufacturing equipment. This equipment is seven- year MACRS property for tax purposes. In four years, the equipment will be worth about half of what we paid for it. We will have to invest $1,150,000 in net working capital at the start. After that, net working capital requirements will be 25 percent of sales. Assume a 28 percent required Return and a 21 percent tax rate throughout. 9. Vandelay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,900,000 and will last for six years. Variable costs are 35 percent of sales, and fixed costs are $210,000 per year. Machine B costs $5,800.000 and will last for nine years. Variable costs for this machine are 30 percent of sales and fixed costs are $245,000 per year. The sales for each machine will be S13 million per year. The required return is 10 percent, and the tax rate is 24 percent. Both machines will be depreciated on a straight-line basis. If the company plans to replace the machine when it wears out on a perpetual basis, which machine should it choose