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Your firm is contemplating the purchase of a new $550,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year

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Your firm is contemplating the purchase of a new $550,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year Iffe. It will be worth $74,000 at the end of that time. You will be able to reduce working capital by $99,000 (this is a one-time reduction). The tax rate is 23 percent and the required return on the project is 11 percent. If the pretax cost savings are $150,000 per year, what is the NPV of this project? (Do not round Intermedlate calculatlons and round your answer to 2 decimal places, e.g., 32.16.) Will you accept or reject the project? Accept Reject If the pretax cost savings are $115,000 per year, what is the NPV of this project? (A negatlve answer should be Indlcated by a minus sign. Do not round Intermedlate calculations and round your answer to 2 decimal places, e.g., 32.16.) Will you accept or reject the project? Reject Accept At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it? (Do not round intermedlate calculatlons and round your answer to 2 decimal places, e.g., 32.16.)

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