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A new electronic process monitor costs $ 7 , 0 0 0 , 0 0 0 . This cost could be depreciated at 3 0

A new electronic process monitor costs $7,000,000. This cost could be depreciated at 30% per year (CCA Class 10). The monitor could be sold for $1,428,595 at the end of five years. The new monitor would save the firm $2,400,000 before taxes in annual operating costs for the five years. There would be no impact on net working capital. The firms weighted average cost of capital is 15% and the corporate tax rate is 40%.
3. What would be the NPV of purchasing this system?
A) $866,886
B) $816,957
C) $3,310,960
D) $92,891
E) $512,639

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