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Omicron Industries is analyzing the purchase of a new $415,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5

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Omicron Industries is analyzing the purchase of a new $415,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5 -year life. It will be worth $42,000 at the end of that time. You will save $141,000 before taxes per year in order processing costs. You will be able to reduce Net Working Capital by $39,000 at the beginning of the project. Net Working Capital will revert back to normal at the end of the project. If the tax rate is 24 percent, what is the IRR for this project? Note: The Net Working Capital is the opposite in this problem from the examples in class. Positive to start and negative at the end. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Delta Products is considering a new 4-year expansion project that requires an initial fixed asset investment of $2.15 million. The fixed asset will be depreciated straight-line to zero over its 4 -year life, after which time it will be worthless. The project is estimated to 'generate $2.23 milllon in profits per year. If the tax rate is 17%, what is the OCF for this project? (Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.) Kappa Holdings is looking at a new system with an installed cost of $665,000. This cost will be depreciated straight-line to zero over the project's 5-year life, at the end of which the system can be salvaged for $87,000. The system will save the firm $187,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $39,000, which will be returned at the end of the project. If the tax rate is 22 percent and the discount rate is 10 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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