What is irr for project if tax rate is twenty-five percent

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Problem 1: The firm is contemplating the purchase of a new $625,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $105,000 at the end of that time. You will save $196,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $120,000 (this is a one-time reduction). If the tax rate is 25 percent, what is the IRR for this project?

Reference no: EM132958225

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