Your firm is contemplating the purchase of a new $530,000 computerbased order entry system. The system will be depreciat

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answerhappygod
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Your firm is contemplating the purchase of a new $530,000 computerbased order entry system. The system will be depreciat

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Your firm is contemplating the purchase of a new$530,000 computerbased order entry system. The system will bedepreciated straight-line to zero over its five-year life. It willbe worth $50,000 at the end of the tie. You will save $186,000before taxes per year in order processing costs, and you will beable to reduce working capital by $85,000 (this is a one-timereduction). If the tax rate is 35 percent, what is the IRR for theproject?
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