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Please make sure the answer is correct and show how you got it, thanks! Your firm is contemplating the purchase of a new $505,000 computer-based
Please make sure the answer is correct and show how you got it, thanks!
Your firm is contemplating the purchase of a new $505,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 6 -year ife. It will be worth $69,000 at the end of that time. You will save $177,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $48,000 at the beginning of the project. Working capital will revert back to normal at the end of the project if the tax rate is 23 percent, what is the IRR for this project? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16 Step by Step Solution
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