Computation of internal rate of return

Reference no: EM1311881

Computation of Internal Rate of Return (IRR).

Project Evaluation

Your firm is contemplating the purchase of a new $758,500 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $73,800 at the end of that time. You will save $295,200 before taxes per year in order processing costs and you will be able to reduce working capital by $43,164 (this is a one-time reduction). If the tax rate is 34 percent, the IRR for this project is ________percent.

Reference no: EM1311881

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