Question: CASE 3: Cost Cutting Project Your company is considering a new computer system that will initially cost $1 million It will save $300,000 per year

CASE 3: Cost Cutting Project Your company is considering a new

CASE 3: Cost Cutting Project Your company is considering a new computer system that will initially cost $1 million It will save $300,000 per year in inventory and receivables management costs The system is expected to last for five years and will be depreciated using 3-year MACRS The system is expected to have a salvage value of $50,000 at the end of year 5 There is no impact on net working capital The marginal tax rate is 21%. The required return is 8% Based on these preliminary project estimates, what is the NPV of the project? What is the IRR

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