Your firm is contemplating the purchase of a new $645,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $47,000 at the end of that time. You will be able to reduce working capital by $42,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. Assume the tax rate is 30 percent.
Requirement 1: Suppose your required return on the project is 9 percent and your pretax cost savings are $197,000 per year. What is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
NPV_______________ $
Requirement 2: Suppose your required return on the project is 9 percent and your pretax cost savings are $137,000 per year. What is the NPV of the project? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)
NPV___ $
*Please show all work*