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5. Your firm is considering purchasing a new computer- based order entry scheme for 520,000. The system will be depreciated on a straight-line basis

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5. Your firm is considering purchasing a new computer- based order entry scheme for 520,000. The system will be depreciated on a straight-line basis to zero over its five- year life. It will be worth 35,000 at the end of that time. You will save 160,000 before taxes per year in order- processing costs and you will be able to reduce working capital by 35,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. If the tax rate is 35%, what is the IRR for this project?

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