A manager of Coastal Mutual Funds is contemplating acquiring servers to operate its website. The servers will cost $1,000,000 cash and will have zero terminal salvage value. The recovery period and useful life are both 5 years. Annual pretax cash savings from operations will be $260,000. The income tax rate is 30%, and the required after-tax rate of return is 10% : (Click the icon to view the present value factor table.) (Click the icon to view the present value annuity factor table.) Read the requirements. Requirement 1. Compute the NPV, assuming straight-line depreciation of $200,000 yearly for tax purposes. Should Coastal acquire the computers? Explain. Begin by computing the net present value (NPV) of the computer investment. (Enter the present value factor to four decimal places, "X.XXXX." Round dollar amounts the nearest whole number. Use a minus sign or parentheses for a negative net present value.) Present Value of Ordinary Annuity of $1 at 5 years, 10% Total Present Annual Cash Inflow Value Net present value: Present value of annuity of equal annual: After-tax cash flows from operations After-tax cash savings from depreciation Less: Initial investment per year = per year = Net present value A manager of Coastal Mutual Funds is contemplating acquiring servers to operate its website. The servers will cost $1,000,000 cash and will have zero terminal salvage value. The recovery period and useful life are both 5 years. Annual pretax cash savings from operations will be $260,000. The income tax rate is 30%, and the required after-tax rate of return is 10%. E: (Click the icon to view the present value factor table.) E: (Click the icon to view the present value annuity factor table.) Read the requirements Requirement 1. Compute the NPV, assuming straight-line depreciation of $200,000 yearly for tax purposes. Should Coastal acquire the computers? Explain. Begin by computing the net present value (NPV) of the computer investment. (Enter the present value factor to four decimal places, "X.XXXX." Round dollar amounts the nearest whole number. Use a minus sign or parentheses for a negative net present value.) Present Value of Annual Cash Ordinary Annuity of $1 at 5 years, 10% Total Present Value Inflow Net present value: Present value of annuity of equal annual: After-tax cash flows from operations After-tax cash savings from depreciation Less: Initial investment per year = X per year = Net present value