accounting 422233

Gemini, LLC, invested $1 million in a state of the art information system that promises to reduce processing costs for its purchasing activities by $120,000 per year for the by Savings Explorer” href=”http://sjc.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do#” class=”c1″>next 10 years. The company will scrap its old information system and will receive no money as a consequence. The new system will be depreciated over 10 years at a rate of $100,000 per year. Gemini’s tax rate is 30 percent, and the company has a 7 percent after taxcost of capital.

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What is the after tax net present value of Gemini’s new information system? Use thetime value of money charts as needed for your calculations. If required, use a minus sign to indicate a negative net present value. Do not round intermediate amounts. Round your final answer to two decimal places.

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