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Your firm is contemplating the purchase of a new $ 5 6 0 , 0 0 0 computer - based order entry system. The system

Your firm is contemplating the purchase of a new $560,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $80,000 at the end of that time. You will be able to reduce working capital by $105,000(this is a one-time reduction). The tax rate is 25 percent and the required return on the project is 13 percent.
If the pretax cost savings are $150,000 per year, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.) If the pretax cost savings are $115,000 per year, what is the NPV of this project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)

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