Your firm is contemplating the purchase of a new $647,500 computer-based order entry system. The system will be depreciated straight-line to zero...

Your firm is contemplating the purchase of a new $647,500 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $63,000 at the end of that time. You will be able to reduce working capital by $87,500 (one-time reduction). The tax rate is 33 percent and your required return on the project is 24 percent and your pretax cost savings are $224,150 per year.