Your firm is contemplating the purchase of a new $590,000 computer-based order entry system. The system will
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Question:
Your firm is contemplating the purchase of a new $590,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $62,000 at the end of that time. You will save $220,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $77,000 (this is a one-time reduction). If the tax rate is 34 percent, what is the IRR for this project?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
IRR%
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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