Your firm is contemplating the purchase of a new $585,000 computer-based order entry system. The system...

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Your firm is contemplating the purchase of a new $585,000computer-based order entry system. The system will be depreciatedstraight-line to zero over its five-year life. It will be worth$95,000 at the end of that time. You will be able to reduce workingcapital by $120,000 (this is a one-time reduction). The tax rate is25 percent and the required return on the project is 13percent.
If the pretax cost savings are $160,000 per year, what is theNPV of this project? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)If the pretax cost savings are $115,000 per year,what is the NPV of this project? (A negative answer shouldbe indicated by a minus sign. Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)
At what level of pretax cost savings would you be indifferentbetween accepting the project and not accepting it? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

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Your firm is contemplating the purchase of a new $585,000computer-based order entry system. The system will be depreciatedstraight-line to zero over its five-year life. It will be worth$95,000 at the end of that time. You will be able to reduce workingcapital by $120,000 (this is a one-time reduction). The tax rate is25 percent and the required return on the project is 13percent.If the pretax cost savings are $160,000 per year, what is theNPV of this project? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)If the pretax cost savings are $115,000 per year,what is the NPV of this project? (A negative answer shouldbe indicated by a minus sign. Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)At what level of pretax cost savings would you be indifferentbetween accepting the project and not accepting it? (Do notround intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)