Answered step by step
Verified Expert Solution
Question
1 Approved Answer
your firm is contemplating the purchase of a new $480000 computer-based order entry system. The system will be depreciated straight line to zero over its
your firm is contemplating the purchase of a new $480000 computer-based order entry system. The system will be depreciated straight line to zero over its five year life. It will be worth $30000 at the end of that time. You will save $145000 before taxes per year in ordering processing costs, and you will be able to reduce working capital by $35000 at the beginning of the project. Working capital will revert back to normal at the end of the project. If the tax rate is 35% what is the irr for this project?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started