Computer-based order entry system

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Your firm is contemplating the purchase of a new $669,931 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be sold for $51,559 at the end of that time. You will save $199,163 before taxes per year in order processing costs, and you will be able to reduce working capital by $50,517 at the beginning of the project. Working capital will revert back to normal at the end of the project. The tax rate is 39 percent. What is the NPV of this project if the discount rate is 9.3 percent?

Reference no: EM131551524

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