• A proposed cost-saving device has an installed cost of $585,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $45,000, the marginal tax rate is 35 percent, and the project discount rate is 12 percent. The device has an estimated Year 5 salvage value of $65,000. What level of pretax cost savings do we require for this project to be profitable?