16. Project Evaluation Your firm is contemplating the purchase of a new $535,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $30,000 at the end of that time. You will save $165,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $60,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. If the tax rate is 24 percent, what is the IRR for this project? 23. Cost-Cutting Proposals Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $445,000 is estimated to result in $160,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $40,000. The press also requires an initial investment in spare parts inventory of $20,000, along with an additional $2,800 in inventory for each succeeding year of the project. If the shop's tax rate is 22 percent and its discount rate is 9 percent, should the company buy and install the machine press