1. Your company is considering purchasing a new system that costs $200,500. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the system is expected to be sold for $35,000 cash. The system will save the firm $110,400 per year in pretax operating costs. What is the after-tax cost saving per year associated with the new system? The tax rate is 21%.

A. $40,100

B. $23,184

C. $87,216

D. $110,400

2. Use the information from the previous question, what is the annual depreciation tax shield?

A. $31,679

B. $40,100

C. $42,105

D. $8,421

3. Use the information from the previous question, what is the net present value of this project if the discount rate is 12 percent?

A. $164,110

B. $119,200

C. $144,249

D. $159,939

4. Use the information from the previous question, what is the internal rate of return for this project?

A. 38.26 percent

B. 39.79 percent

C. 40.18 percent

D. 36.25 percent