Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Your firm is contemplating the purchase of a new $798,000 computer-based order entry system. The system will be depreciated straight-line to zero over its seven-year
Your firm is contemplating the purchase of a new $798,000 computer-based order entry system. The system will be depreciated straight-line to zero over its seven-year life. It will be worth $59,000 at the end of that time. You will save $179,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $54,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. Required: If the tax rate is 30 percent, what is the IRR for this project? (Do not include the percent sign (%). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations.Round your answer to 2 decimal places. IRR ______%
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