Your firm is contemplating the purchase of a new $1,554,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $151,200 at the end of that time. You will be able to reduce working capital by $210,000 (this is a one-time reduction). The tax rate is 32 percent and your required return on the project is 21 percent and your pretax cost savings are $687,500 per year.

Requirement 1:

What is the NPV of this project?

(Click to select)$281,787.71$287,259.32$273,580.30$259,901.29$265,372.89

Requirement 2:

What is the NPV if the pretax cost savings are $495,000 per year?

(Click to select)$-109,431.05$-103,959.49$-114,902.60$-112,713.98$-106,148.11

Requirement 3:

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