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your firm is contemplating the purchase of a new $ 5 3 0 , 0 0 0 computer based order enrty system. the system will

your firm is contemplating the purchase of a new $530,000 computer based order enrty system. the system will be depreciated straightline to zero over its 7 year life. it will be worth $75000 at the end of that time. you will save $185000 before taxes per year in order processing costs, and you will be able to reduce working capital by $50000 at the begunning if the project. working caputal will revert back to normal at the end of the project. the tax rate is 25 percent. what is the aftertax salvage value of th equipment? 2. what is the annual operating cash flow? 3. what is IRR for this project?

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