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Your firm is contemplating the purchase of a new $1,739,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year

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Your firm is contemplating the purchase of a new $1,739,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $169,200 at the end of that time. You will be able to reduce working capital by $235,000 (this is a one-time reduction). The tax rate is 24 percent and your required return on the project is 24 percent and your pretax cost savings are $785,500 per year. a. What is the NPV of this project? $327,805.72 $317,971.55 $311,415.44 $344,196.01 $337,639.90 b. What is the NPV if the pretax cost savings are $565,550 per year? $-131,118.23 $-127,184.68 $-124,562.31 $-124,562.31 $-135,051.77 C. At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it? 3 $-135,051.77 Skipped c. At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it? $628,391.47 $561,049.51 $ 60,039.89 $659,811.04 $596,971.89 Me

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