A retailer is contemplating the purchase of a new inventory management system with the following financials:

• Capital cost: $250,000
• Useful life: 3 years
• Expected annual savings: $90,000
• Annual maintenance costs: $10,000
• Tax rate: 28%
• Salvage value: $0

Present value factors:

• 6%: 2.673
• 8%: 2.577
• 10%: 2.487

You are asked to:

• Calculate the depreciation expense per year.
• Determine the after-tax annual cash flows.
• Compute the NPV for each discount rate.
• Identify the project's IRR.
• Suggest whether the purchase should be made.