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There are 3 questions to discuss please answer all three, i have done part A Shellys Tax Services prepares tax returns for individuals and small
There are 3 questions to discuss please answer all three, i have done part A
Shellys Tax Services prepares tax returns for individuals and small businesses. The firm employs four tax professionals. Currently, all tax returns are prepared on a manual basis. The firms owner, Shelly Foster, is considering purchasing a computer system that would allow the firm to serve all its existing clients with only three employees. To evaluate the feasibility of the computerized system, Foster has gathered the following information: Foster has determined that she will invest in the computer system if its pre-tax payback period is less than 3.5 years and its pre-tax IRR exceeds 12 percent. a. Compute the payback period for this investment. (Round time to one decimal point.) Does the payback meet Fosters criterion? Explain. b. Compute the IRR for this project to the nearest percentage. Based on the computed IRR, is this project acceptable to Foster? Explain. c. What qualitative factors should Foster consider in evaluating the projectStep by Step Solution
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