Your firm is contemplating the purchase of a new $$535,000$ computer$-$based order entry

system. The system will be depreciated straight$-$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($this is a one$-$time reduction$).$ The tax rate is $24$ 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? $($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$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.

Will you accept or reject the project?

Accept $o.$

Reject

If the pretax cost savings are $$100,000$ 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$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.

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 intermediate calculations and round your

answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$