Your firm is contemplating the purchase of a new $1,054,500 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $102,600 at the end of that time. You will be able to reduce working capital by $142,500 (this is a one-time reduction). The tax rate is 23 percent and your required return on the project is 17 percent and your pretax cost savings are $287,050 per year. a. What is the NPV of this project? b. What is the NPV if the pretax cost savings are $398,700 per year? c. At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it? Dog Up! Franks is looking at a new sausage system with an installed cost of $694,200. This cost will be depreciated straight-line to zero over the project's 9-year life, at the end of which the sausage system can be scrapped for $106,800. The sausage system will save the firm $213,600 per year in pretax operating costs, and the system requires an initial investment in net working capital of $49,840. If the tax rate is 22 percent and the discount rate is 11 percent, what is the NPV of this project? Multiple Choice $354,842.02 $324,485.71 $340,709.99 $322,276.42 $291,920.11