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Your firm is contemplating the purchase of a new $580,000 computer-based order entry system. The system...

Your firm is contemplating the purchase of a new $580,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $92,000 at the end of that time. You will save $179,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $117,000 (this is a one-time reduction). If the tax rate is 24 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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Expert Solution

The answer is 20.83

jeff jeffy answered 1 year ago
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