Question $5$

Closs Clothing is evaluating the purchase of computerized clothes design software. The

software is expected to cost R$160000.$ It has a useful life of five years and a zero salvage at

the end of its useful life. Assume the following depreciation patterns for the asset

The company's tax rate is $30$ percent, and its cost of capital is $8$ percent. The software is

expected to generate the following cash savings and cash expenses:

Required:

$5\mathrm{.}1.$ Calculate the net present value.

$5\mathrm{.}2.$ Calculate the payback time.

$5\mathrm{.}3.$ Calculate the profitability index.

$5\mathrm{.}4.$ Discuss the appropriateness of making such investment.

$5\mathrm{.}5.$ What other factors should the company consider in evaluating this investment?

$(3)$