Your firm is contemplating the purchase of a new $540,000 computer -based order entry system. The system will be depreciated straight - line tozero over its five-year life. It will be worth $52,000 at the end of that time.You will save $300,000 before taxes per year in order processing costs, andyou will be able to reduce working capital by $67,000 (this is a one-timereduction). If the tax rate is 23 percent, what is the IRR for this project? (Donot round intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

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Answered: Your firm is contemplating the purchase…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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