What is the cash flow from assets in year

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Your profitable company is considering acquiring a new computer system that will initially cost $1,000,000 and will save $400,000 per year in inventory and receivables management costs. The system will last for four years. The system is expected to have a salvage value of $100,000 at the end of year 4 and will be depreciated to zero using three year MACRS (rates are: Year 1: .3333, Year 2: .4445, Year 3: .1481, Year 4: .0741). The marginal tax rate is 40%. Assume a required rate of return of 12%.

What is the cash flow from assets in year 4 as well as the NPV and the IRR?

Reference no: EM131551415

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