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Your firm is contemplating the purchase of a new $991,200 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year
Your firm is contemplating the purchase of a new $991,200 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $88,500 at the end of that time. You will save $389,400 before taxes per year in order processing costs and you will be able to reduce working capital by $9,710 (this is a one-time reduction) Required If the tax rate is 33 percent, what is the IRR for this project? (Do not round your intermediate calculations.) Multiple Choice 19.82% 20.12% 19.56% 20.65% 21,68%
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