Home / Questions / Your firm is contemplating the purchase of a new $669000 computer based order entry syste...
Your firm is contemplating the purchase of a new $669,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $54,000 at the end of that time. You will save $174,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $49,000 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 40 percent, what is the IRR for this project? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
IRR | % |
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