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28 Sep 2019
Your firm is contemplating the purchase of a new $610,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $66,000 at the end of that time. You will save $240,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $81,000 (this is a one-time reduction). If the tax rate is 35 percent, what is the IRR for this project? (Round your answer to 2 decimal places. (e.g., 32.16))
Your firm is contemplating the purchase of a new $610,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $66,000 at the end of that time. You will save $240,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $81,000 (this is a one-time reduction). If the tax rate is 35 percent, what is the IRR for this project? (Round your answer to 2 decimal places. (e.g., 32.16))
Bunny GreenfelderLv2
28 Sep 2019
