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A cost-saving device has an installed cost of $785,000. The device will be used in a five-year project and will be depreciated using straight line

A cost-saving device has an installed cost of $785,000. The device will be used in a five-year project and will be depreciated using straight line method. The required initial net working capital investment is $75,000, the marginal tax rate is 25 percent, and the project discount rate is 9 percent. The device has an estimated Year 5 salvage value of $115,000. What level of pretax cost savings do we require for this project to be profitable (i.e. for NPV to be zero)? .

Which of these choices is correct?

  • 206541.14

  • 226541.14

  • 326123.14

  • 239103.14

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