Able to reduce working capital-what is irr for this project

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Reference no: EM131880537

Your firm is contemplating the purchase of a new $540,000 computer-based order entry system. The system will be depreciated straight-line to zero 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, and you will be able to reduce working capital by $67,000 (this is a one-time reduction). If the tax rate is 35 percent, what is the IRR for this project?

Reference no: EM131880537

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