Based on the following, should we buy this new digital printing system? Use the table below to plan your cash flows. Bold boxes are where #'s should go.

?Initially cost $1 million.

?It will save $300,000/yr (pre-tax) in inventory and receivables management costs.

?The system will last for 5 years.Depreciation is 20% year. Salvage value of $50,000.Assume a straight line depreciation approach.

?No impact on net working capital.

?The marginal tax rate is 40%.

?The required return is 8%.

Question #1: Based on the following, should we buy this new digital printing system? Use the table below to plan your cash ows. Bold boxes are where it's should go. ' Initially cost $1 million. it will save $300,000ng [pre-tax) in inventory and receivables management costs. The system will last for 5 years. Depreciation is 20% year. Salvage value of $50,000. Assume a straight line depreciation approach. No impact on net working capital. The marginal tax rate is 40%. The required return is 8%. (bah Flam Year Equipment Cost After Tax Savings Depreciation Tax shield {Benet} NPV