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Your firm is contemplating the purchase of a new $ 7 5 8 , 5 0 0 System - based order entry system. The system
Your firm is contemplating the purchase of a new $ Systembased order entry system. The system will be depreciated straightline to zero over its year life. It will be worth $ at the end of that time. You will be able to reduce working capital by $this is a onetime reduction The tax rate is percent and your required return on the project is percent and your pretax cost savings are $ per year.
a What is the NPV of this project?
b What is the NPV if the pretax cost savings are $ per year?
c At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it
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