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Your firm is contemplating the purchase of a new $535,000 computer-based order entry system. The system will be depreciated stralght-line to zero over its five-year

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Your firm is contemplating the purchase of a new $535,000 computer-based order entry system. The system will be depreciated stralght-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 at the beginning of the project. Working capital will revert back to normal at the end of the project. Assume the tax rate is 24 percent. a. Suppose your required return on the project is 11 percent and your pretax cost savings are $150,000 per yeat. What is the NPV of the project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.9. 32.16. b. Suppose your required return on the project is 11 percent and your pretax cost savings are $100,000 per year. What is the NPV of the project? Note: A negative answer should be indicated by a minus slgn. Do not round intermediate caiculations and round your answer to 2 decimal places, e.9., 32.16

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