eEgg is considering the purchase of a new distributed network computer system to help handle its warehouse inventories. The system costs $56,000 to purchase and install and $31,500 to operate each year. The system is estimated to be useful for 4 years. Management expects the new system to reduce the cost of managing inventories by $60,000 per year. The firm's cost of capital (discount rate) is 9%.

Required:

1. What is the net present value (NPV) of the proposed investment under each of the following independent situations. (Use the approximate present value factors from Appendix C, Table 1 and Appendix C Table 2)

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