Your company is considering a purchase of a $580,000 computer-based order entry system. The system will be depreciated straight line to zero over its 5-year life. It will be worth $69,000 at the end of that time. You will save $178,000 before taxes per year in order processing costs, and you will be able to reduce the working capital by $84,000 (a one time reduction). a) If the tax rate is 21%, what is the IRR?

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A:

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Q: Raghubhai

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A: To open the "IRR function" window - MS-Excel --> Formulas --> Financials --> IRR.

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A: Please find the answer to the above question below:

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