What is the IRR on the investment

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Question 1: We are considering the purchase of a $200,000 computer-based inventory management system. It will be depreciated straight-line to zero over its 4 year life. It will be worth $30,000 at the end of its life. The system will save us $60,000 before taxes in inventory-related costs. The relevant tax rate is 39% because the new setup is more efficient than our existing one, we can carry less total inventory, thereby freeing up $45,000 in net working capital what is the NPV at 16%? what is the IRR on this investment?

Reference no: EM132483819

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