A proposed cost-saving device has an installed cost of $815,000. The device will be used in...

A proposed cost-saving device has an installed cost of $815,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $87,000, the marginal tax rate is 21 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $133,000. What level of pretax cost savings do we require for this project to be profitable?

What is the pretax cost savings? (Only round to 2 decimal places, do not round intermediate calculations)

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jeff jeffy answered 2 years ago

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