Your firm is considering the purchase of a new $425,000 computer-based order

entry system. The system will be depreciated straight-line to zero over its 5-year

life. The computer system will be worth $30,000 at the end of that time. The firm

will save $130,000 per year pre-tax in order processing costs and reduce working

capital by $60,000 (a one-time reduction). If the tax rate is 35%, what is the IRR

of the project?