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Your firm is considering of a new project by purchasing a computer-based order entry system that costs S560,000. The machine will be depreciated straight-line to
Your firm is considering of a new project by purchasing a computer-based order entry system that costs S560,000. The machine will be depreciated straight-line to zero over its five-year life time. The machine will be worth $56,000 at the end of the project (at the end of five-year life). The project is estimated to generate $450,000 in annual sales, with cost of S170,000. And you will be able to reduce working capital by $71,000. If the tax rate is 34 percent, what is the IRR for this project
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