Your firm is contemplating the purchase of a new $$535,000$ computer$-$based

order entry system. The system will be depreciated straight$-$line to zero over its

five$-$year life. It will be worth $$30,000$ at the end of that time. You will be able to

reduce working capital by $$60,000($this is a one$-$time reduction$).$ The tax rate

is $24$ percent and the required return on the project is $11$ percent.

If the pretax cost savings are $$150,000$ per year, what is the NPV of this

project? $($A negative answer should be indicated by a minus sign. Do not

round intermediate calculations and round your answer to $2$ decimal

places, e$.$g$.32\mathrm{.}16.)$

Will you accept or reject the project?

multiple choice $1$

Accept

Reject

If the pretax cost savings are $$100,000$ per year, what is the NPV of this

project? $($A negative answer should be indicated by a minus sign. Do not

round intermediate calculations and round youranswer to $2$ decimal

places, e$.$g$.32\mathrm{.}16.)$

Will you accept or reject the project?

multiple choice $2$

Reject

Accept

At what level of pretax cost savings would you be indifferent between accepting

the project and not accepting it$?($Do not round intermediate calculations and

round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$