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Legal Justice is contemplating the purchase of a new $800,000 customer entry system. The system will be depreciated straight-line to zero over its four-year life.
Legal Justice is contemplating the purchase of a new $800,000 customer entry system. The system will be depreciated straight-line to zero over its four-year life. It will be worth $30,000 at the end of that time. You will save $230,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $80,000 (this is a one-time reduction). If the tax rate is 25 percent, what is the IRR for this project? (On excel if possible)
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