What is the IRR for this project

Assignment Help Financial Management
Reference no: EM131865021

Your firm is contemplating the purchase of a new $545,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $53,000 at the end of that time. You will save $295,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $68,000 (this is a one-time reduction). If the tax rate is 34 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

IRR _____%

Reference no: EM131865021

Questions Cloud

Determining lease payment amounts : which is guaranteed by Ftcap The interest rate used by Ryan in determining lease payment amounts (the “implicit” rate) is 8%.
Computer the company current ratio : Computer the company's current ratio.
Why does mansueto recommend investing early in life : Describe why does Mansueto recommend investing early in life, even in high school?
Using net present value when evaluating projects : Green Landscaping, Inc. is using net present value (NPV) when evaluating projects.
What is the IRR for this project : Your firm is contemplating the purchase of a new $545,000 computer-based order entry system. what is the IRR for this project?
What is the current effective annual interest rate : Assuming that Mr. Gruber paid a fair price for his shares, what is the current effective annual interest rate?
Abilities to solve problems through policy creation : The expectation of those creating public policy often____ their abilities to solve problems through policy creation.
Calculating present values band future values : Calculating Present Values. Calculating Future Values. Calculating rates of return. Refer back to Series EE saving bonds.
Write detailed action plan for one new goal for professional : Write a detailed Action Plan for one new goal for professional and personal development based on manageral finance.

Reviews

Write a Review

Financial Management Questions & Answers

  Effective annual percentage cost

The company decides not to take the discount, and it generally pays after 60 days. Assuming the company purchases $5.5 million worth of inventory, what is the effective annual percentage cost of its non-free trade credit (assume a 365-day year)?

  Plow back its earnings to fuel growth

No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth.

  What do you view as most significant factor of consideration

How do health care organizations balance a competitor-centered approach with a consumer-centered approach in marketing their products or services? What do you view as the most significant factor of consideration? Support and justify your position wit..

  Determine the appraised value of home using cost approach

Let’s assume that we are about to appraise a house using the cost approach. determine the appraised value of the home using the cost approach.

  What will be the amount of your monthly mortgage payment

The house you want to buy costs $260 thousand. You plan to make a cash down payment of 10 percent, and borrow the rest in a 30 year mortgage at 4.8 percent APR. What will be the amount of your monthly mortgage payment?

  Compute the amount that couple deposited into account

Compute the amount that the couple deposited into the account when they opened it

  Define and explain capex and how you calculate

Define A/R Turn Days and how you calculate. Define A/P Turn Days and how you calculate. Define Inventory Turn Days and how you calculate. Define and explain CAPEX and how you calculate.

  When computing the net present value of the project

FMC Technologies is considering a project that requires $2,380,000 of fixed assets. When the project ends, those assets are expected to have an after-tax salvage value of $145,000. How is the $145,000 salvage value handled when computing the net pres..

  What does this firms beta measure

A rapidly growing firm is currently paying a dividend of $1.75. What does this firm’s Beta measure?

  What is the net present value of project

What is the payback period for the project? What is the net present value of the project ?

  Find number of shares held by bidvest holdings in adcock

Calculate the total number of shares to be acquired by CFR based on Adcock's market value of R70 per share and calculate the number of shares held by Bidvest Holdings in Adcock.

  Using the sales-based inventory turnover ratio

Mall Toys Co. has a quick ratio of 2.00x, $32,175 in cash, $17,875 in accounts receivable, some inventory, total current assets of $71,500, and total current liabilities of $25,025. The company reported annual sales and cost of goods sold of $300,000..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd