Business, 26.08.2020 17:01 justinhudson17

Your firm is contemplating the purchase of a new $684,500 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $66,600 at the end of that time. You will be able to reduce working capital by $92,500 (this is a one-time reduction). The tax rate is 21 percent and your required return on the project is 21 percent and your pretax cost savings are $203,750 per year. At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it?

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Your firm is contemplating the purchase of a new $684,500 computer-based order entry system. The sys...

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