Calculating Required Savings A proposed cost-saving device has an installed cost of £360,000. The device will be used in a five-year project and be depreciated using the reducing balance method at 20 per cent per annum. The required initial net working capital investment is £20,000, the marginal tax rate is 24 per cent, and the project discount rate is 12 per cent. The device has an estimated year 5 salvage value of £60,000. What level of pre-tax cost savings do we require for this project to be profitable?