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the pretax cost savings are $100,000 per year, what is the NPV of this project? egative answer should be indicated by a minus sign. Do not round intermedia alculations and round your answer to 2 decimal places, e.g., 32.16.) NPV Will you accept or reject the project? O Reject

the pretax cost savings are $100,000 per year, what is the NPV of this project? egative answer should be indicated by a minus sign. Do not round intermedia alculations and round your answer to 2 decimal places, e.g., 32.16.) NPV Will you accept or reject the project? O Reject

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Correct only pls. Only the highlighted parts. Npv if pretax cost savings are $100000 per year is -121277. 58. Now how to find the last part.
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., 32.16.) NPV Will you accept or reject the project? ○ Accept 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., 32.16.) NPV Will you accept or reject the project?
Transcribed Image Text: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., 32.16.) NPV Will you accept or reject the project? ○ Accept 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., 32.16.) NPV Will you accept or reject the project?
Will you accept or reject the project? O 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., 32.16.) NPV 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., 32.16.) Cost savings
Transcribed Image Text:Will you accept or reject the project? O 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., 32.16.) NPV 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., 32.16.) Cost savings
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