Your company is considering a new computer system that will initially cost $1 million.

2. It will save $300,000 per year in inventory and receivables management costs.

3.The system is expected to last for five years and will be depreciated using 3-year MACRS.

4.The system is expected to have a salvage value of $50,000 at the end of year 5.

5. There is no impact on net working capital.

6. The marginal tax rate is 40%.

7. The required return is 8%.