10.13 An industrial engineer proposed the purchase of scanning equipment for the company's warehouse and weave rooms. The engineer felt that the purchase would provide a better system of locating cartons in the warehouse by recording the locations of the cartons and storing the data in the c The estimated investment, annual operating and maintenance costs, and expected annual savings are as follows: Cost of equipment and installation: $65,500. Project life: 6 years. Expected salvage value: $3,000. Investment in working capital (fully recoverable at the end of the project life): $10,000. Expected annual savings on labour and materials: $55,800. Expected annual expenses: $8,120. CCA rate: 30%. The firm's marginal tax rate is 35%. (a) Determine the net after-tax cash flows over the project life. b) Compute the IRR for this investment. (c) At MARR 18%, is the project acceptable