Your Vice President for MIS informs you that she has researched the possibility of automating your organization's order-entry system. She has projected that the new system will reduce labor costs by $50,000 each year over the next five years. The purchase price (including installation and testing) of the new system is $210,500. The system is expected to have a useful life of 5 years, after which time (in year 6) it can be sold in the secondary computer systems market for $20,500.

What is the Net Present Value of this investment if the discount rate is 10.5% per year?

Would you invest in the new system?