Question
Your firm is contemplating the purchase of a new $650,000 computer-based order entry system. the system will be depreciated straight-line to zero over its five-year
Your firm is contemplating the purchase of a new $650,000 computer-based order entry system. the system will be depreciated straight-line to zero over its five-year life. it will be worth $60,000 at the end of that time. you will save $230,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $95,000 (this is a one-time reduction). if the tax rate is 35 percent, what is the IRR for this project?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
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