Scott Investors, Inc. is considering the purchase of a $450,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be $800,000 in five years. The computer will replace five office employees whose combined annual salaries is $140,000. The machine will also immediately lower the firms required net working capital by $90,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 34%. Is it worthwhile to buy the computer if the appropriate discount rate is 12%?

After year 5, Scott Investors is expected to grow at a rate of 4%. Assume the value of debt is$ 200,000 and the number of shares outstanding is 20,000. Given this information,

What is the firm value?

What is the price per share of equity?