Finance 301

Your firm is contemplating the purchase of a new $720,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $75,000 at the end of that time. You will be able to reduce working capital by $110,000 (this is a one-time reduction). The tax rate is 35 percent and your required return on the project is 20 percent. If your pretax cost savings are $300,000 per year, the NPV for the project is __________ and you will (Accept/Reject?) the project. If your pretax cost savings are $240,000 per year, the NPV for the project is _________ and you will (Accept/Reject?) the project. You would be indifferent between accepting the project and not accepting it if your pretax cost savings were _________