eEgg is considering the purchase of a new distributed network computer system to help handle its warehouse inventories. The system costs $55,000 to purchase and install and $32,000 to operate each year. The system is estimated to be useful for four years. Management expects the new system to reduce by $61,500 a year the cost of managing inventories. The firms cost of capital is 11%.

Required:

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

	a.	The firm is not yet profitable and pays no taxes. (Round your answer to nearest whole dollar amount.)
	b.	The firm is in the 30% income tax bracket and uses straight-line depreciation with no salvage value. Assume MACRS rules do not apply. (Round your answer to nearest whole dollar amount.)
	c.	The firm is in the 30% income tax bracket and uses double-declining-balance depreciation with no salvage value. Assume MACRS rules do not apply. (Negative amounts should be indicated by a minus sign. Round discount factor to 3 decimal places and other answers to the nearest whole dollar amount.)

2a.	What is the internal rate of return (IRR) of the proposed investment for situation 1(a)? Use the IRR builit-in function in Excel to compute the IRR. (Negative amounts should be indicated by a minus sign. Round "Estimated IRR" to 2 decimal places.)

2b.	What is the internal rate of return (IRR) of the proposed investment for situation 1(b)? Use the IRR builit-in function in Excel to compute the IRR. (Negative amounts should be indicated by a minus sign. Round "Estimated IRR" to 2 decimal places.)