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Loper Fields is evaluating a new order processing system. The cost of the system is $385,000 which will be depreciated on a straight line basis

Loper Fields is evaluating a new order processing system. The cost of the system is $385,000 which will be depreciated on a straight line basis to zero. This project will run for 5 years. At the end of the project the new order processing system may be sold for $60,000. This order processing system will allow Loper Fields to save two salaried positions/benefits in the amount of $135,000 (pre-tax) each year. This system will require an investment in NWC of $35,000 at the beginning of the project. The firms tax rate is 21% and the cost of capital is 10%.

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