Your firm is contemplating the purchase of a new $1,258,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $122,400 at the end of that time. You will be able to reduce working capital by $170,000 (this is a one-time reduction). The tax rate is 35 percent and your required return on the project is 19 percent and your pretax cost savings are $387,900 per year.

Requirement 1:

What is the NPV of this project?

(Click to select)$-88,277.93$-81,421.39$-83,135.52$85,706.72$-89,992.06

Requirement 2:

What is the NPV if the pretax cost savings are $538,800 per year?

(Click to select)$224,911.46$207,775.35$220,627.44$203,491.32$214,201.39

Requirement 3:

At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it?

(Click to select)$470,566.00$409,472.51$368,225.40$452,574.87$431,023.69