Living in Glass Houses, Inc. is looking at new window fabricating equipment with an installation cost of $700,000. This cost will be depreciated straight-line to zero of the project's five year life, at the end of which the equipment will be sold for scrape for $110,000. The equipment will save the company $205,000 per year in pretax operating costs and the system requires an initial investment in net working capital of $35,000.

a. If the tax rate is 34% and the discount rate is 8%, what is the NPV or this project?

b. Would the NPV change if accelerated depreciation was used? If so, how?