Q.) Project Evaluation: Another important feature you are contemplating is the purchase of a new $485 computer-based ord
Posted: Mon Mar 21, 2022 4:32 pm
Q.) Project Evaluation: Another important feature you are
contemplating is the purchase of a new $485 computer-based order
entry system. The system will be depreciated straight-line to zero
over its five-year life. It will be worth $35 at the end of that
time. You will save $140 before taxes per year in order processing
costs, and you will be able to reduce working capital $60 (this is
a one-time reduction). If the tax rate is 24 percent, what is the
IRR for this project? (Please provide the excel formulas as
well)
contemplating is the purchase of a new $485 computer-based order
entry system. The system will be depreciated straight-line to zero
over its five-year life. It will be worth $35 at the end of that
time. You will save $140 before taxes per year in order processing
costs, and you will be able to reduce working capital $60 (this is
a one-time reduction). If the tax rate is 24 percent, what is the
IRR for this project? (Please provide the excel formulas as
well)