The management of Kimco is evaluating the possibility of replacing their large mainframe computer with a modern network

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The management of Kimco is evaluating the possibility of
replacing their large mainframe computer with a modern network
system that requires much less office space. The network would cost
$760,000 (including installation costs) and would save $150,000 per
year in net cash flows (accounting for taxes and depreciation) in
Year 1-2, $160,000 in year3-4, and $120,000 in year 5 due to
efficiency gains. The current mainframe has a remaining book value
of $160,000 and would be immediately sold for $120,000. Kimco’s
discount rate is 10%, and its tax rate is 25%. Based on NPV, should
management install the network system?