Your firm is contemplating the purchase of a new $580,000 computer
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?
Leave a Reply
Want to join the discussion?Feel free to contribute!