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Your firm is contemplating the purchase of a new $1,260,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year
Your firm is contemplating the purchase of a new $1,260,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $112,500 at the end of that time. You will save $495,000 before taxes per year in order processing costs and you will be able to reduce working capital by $103,430 (this is a one-time reduction). If the tax rate is 33 percent, the IRR for this project is percent
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