Your firm is contemplating the purchase of a new $$1,942,500$ computer$-$based order entry system. The system will be depreciated straight$-$line to zero over its $5-$year life. It will be worth $$189,000$ at the end of that time. You will be able to reduce working capital by $$262,500($this is a one$-$time reduction$).$ The tax rate is $22$ percent and your required return on the project is $24$ percent and your pretax cost savings are $$866,600$ per year.

a$.$ What is the NPV of this project?

b$.$ What is the NPV if the pretax cost savings are $$623,950$ per year?

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