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Amazon Corp. is considering the purchase of a new $850,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year

Amazon Corp. is considering the purchase of a new $850,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $150,000 at the end of that time. Amazon will save $350,000 before taxes per year in order processing costs and they will be able to reduce working capital by $125,000 (this is a one-time reduction). If the tax rate is 35 percent and cost of capital is 18%, what is the NPV for this project?

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