$1.$ Your company is conyemplating the purchase of a new $$720000$ internet system. The system will be depreciated straight line to zero over its five year life. It will be worth $$75000$ at the end of the time. You will save $$260000$ before taxes per year in order processing costs and you will be able to reduce working capital by $$110000($this is a one$-$time reduction$).$ If the tax rate is $35$ percent, what is the IRR for this project?

$2.$ In the previos question, suppose your required return on the project is $20$ percent and your pretax cost savings are $$300000$ per year. Will you accept the project? What if the pretax cost savings are $$240000$ per year? At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it$?$