Your firm is contemplating the purchase of a new $1,478,400 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $132,000 at the end of that time. You will save $580,800 before taxes per year in order processing costs and you will be able to reduce working capital by $130,139 (this is a one-time reduction). Required : If the tax rate is 33 percent, what is the IRR for this project?

18.24%

24.20%

22.13%

21.90%

23.05%