Computer-based order entry system

Assignment Help Financial Management

Reference no: EM131013199

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: EM131013199

Questions Cloud

Significant difference in return between both instruments : For the US economy, for the period 1977-2012 calculate the real interest rate using annual 3- month Treasury bills (secondary market) and 30 year Treasury constant maturity. Show in one graph both series. Do you see a significant difference in return..

What you have learned in family systems : Reflect on what you have learned in family systems. If you were a school social worker who was asked to work with school bullies, what family models or therapies you use

Different payment streams and appropriate required returns : You have two assets and must calculate their values today based on their different payment streams and appropriate required returns. Asset 1 has a required return of 14% and will produce a stream of $600 at the end of each year indefinitely. Asset 2 ..

What arguments do they make in common : Franklin and Red Jacket both support and defend the Native Americans. What arguments do they make in common? What prompted the writing of each piece? Do you find both authors reliable? Why or why not

Computer-based order entry system : 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..

Calculate the annual equivalent payments : Please Calculate the annual equivalent payments (end of the year, 1 to 4) for the investment over the 4 year life with nominal 15% interest rate compounded annually. With 1500 dollars investment at present time, income of 600, 500, 400, and 300 dolla..

About the two-asset portfolio : Stock A has an expected return of 13% and a standard deviation of 35%. Stock B has an expected return of 19% and a standard deviation of 60%. The correlation coefficient between Stocks A and B is 0.2. What is the expected return of a portfolio invest..

Defense stocks are to be combined into a stock index : The following three defense stocks are to be combined into a stock index in January 2013 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Suppose that Douglas McDonnell shareholders approve ..

Higher beta stocks are expected to have a lower return rate : A stock that is more volatile than the market will have a Beta of more than 1.0. Stock As beta is 1.0 this means the stock moves in the same direction and magnitude as the market. Higher beta stocks are expected to have a lower return rate.

User Account

All Pages