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Your firm is contemplating the purchase of a new $420,000 computer-based order entry system. The system will be depreclated straight-line to zero over its 5-year

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Your firm is contemplating the purchase of a new $420,000 computer-based order entry system. The system will be depreclated straight-line to zero over its 5-year life. It will be worth $45,000 at the end of that time. You will save $145,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $40,000 at the beginning of the project. Working capltal will revert back to normal at the end of the project. If the tax rate is 25 percent, what is the IRR for this project? (Do not round intermedlate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Pappy's Potato has come up with a new product, the Potato Pet (they are freeze-dried to last longer). Pappy's paid $165,000 for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $880,000 per year. The fixed costs assoclated with this will be $222,000 per year, and variable costs will amount to 18 percent of sales. The equipment necessary for production of the Potato Pet will cost $940,000 and will be depreclated in a straight-line manner for the four years of the product life (as with all fads, it is felt the sales will end quickly). This is the only initial cost for the production. Pappy's has a tax rate of 24 percent and a required return of 13 percent. a. Calculate the payback period for this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Calculate the NPV for this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Calculate the IRR for this project. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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