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The International Logistics Company (ILC) is considering buying an inventory control software program that will cost $140,000, delivered and installed (including personnel training). The program
The International Logistics Company (ILC) is considering buying an inventory control software program that will cost $140,000, delivered and installed (including personnel training). The program will allow the company to reduce its inventory by $100,000. The cost of the software will be expensed the year it is bought. ILC is subject to a 40 percent corporate tax rate, and its weighted average cost of capital is 10 percent. Should ILC buy the software program? Answer the question using economic value added and market value added analysis.
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