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A company is considering the purchase of a $200,000 computer-based inventory management system. It will be depreciated straight-line to zero over its four-year life. It

A company is considering the purchase of a $200,000 computer-based inventory management system. It will be depreciated straight-line to zero over its four-year life. It will be worth $30,000 at the end of that time. The system will save $60,000 before taxes in inventory-related costs. The relevant tax rate is 40%. Because the new setup is more efficient than the existing one, the company will be able to carry fewer inventories and thus free up $45,000 in net working capital. What is the NPV at 16%? What is the DCF return (the IRR) on this investment? What is the MIRR?

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