Question: Please help!! its timed so i dont have a lot if time Your firm is contemplating the purchase of a new $832,500 computer-based order entry

Please help!! its timed so i dont have a lot if time
Please help!! its timed so i dont have a lot if time
Your firm is contemplating the purchase of a new $832,500 computer-based order

Your firm is contemplating the purchase of a new $832,500 computer-based order entry system. The system will be depreclated straight-line to zero over its 5 -year life. It will be worth $81,000 at the end of that time. You will be able to reduce working capital by $112,500 (this is a one-time reduction). The tax rate is 24 percent and your required return on the project is 20 percent and your pretax cost savings are $341,500 per year. a. What is the NPV of this project? b. What is the NPV if the pretax cost savings are $245,900 per year? b. What is the NPV if the pretax cost savings are $245,900 per year? c. At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it

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