In: Finance
Your firm is contemplating the purchase of a new $630,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $109,000 at the end of that time. You will save $198,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $124,000 (this is a one-time reduction). If the tax rate is 21 percent, what is the IRR for this project |