Your firm is contemplating the purchase of a new
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Your firm is contemplating the purchase of a new

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 $60,000 at the end of that time. you will save $210,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $75,000 (one time reduction). if the tax rate is 35%, what is the IRR for this project?

Hint
Accounts & Finance"Internal rate of return (IRR) is a method of calculating the investments rate of return. IRR is a discount rate that makes the NPV of all cash flows to be equal to zero in a discounted cash flow analysis. The higher the IRR the more suitable an investment is."...

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