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Your rm is contemplating the purchase of a new $814,000 computerbased order entry system. The system will be depreciated straight-line to zero over its 5-year

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Your rm is contemplating the purchase of a new $814,000 computerbased order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $79,200 at the end of that time. You will be able to reduce working capital by $110,000 (this is a one-time reduction). The tax rate is 25 percent and your required return on the project is 18 percent and your pretax cost savings are $319,150 per year. a. What is the NPV of this project? b. What is the NPV if the pretax cost savings are $229,800 per year

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