QUESTION
107. Your firm is contemplating the purchase of a new $674,000 computer-based order entry system. The system will be dep
Category: Business
Subject: Finance
Due Date: 02/03/2016
Question Asked: 2016-02-03 03:34:50
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107. Your firm is contemplating the
purchase of a new $674,000 computer-based order entry system. The system will
be depreciated straight-line to zero over its 6-year life. It will be worth
$58,000 at that time. You will save $185,000 before taxes per year in order
processing costs, and you will be able to reduce working capital by $29,000 at
the beginning of the project. Working capital will revert back to normal at the
end of the project. If the tax rate is 34 percent, what is the IRR for this
project?
A. 12.51 percent
B. 12.79 percent
C. 13.01 percent
D. 13.53 percent
E. 14.20 percent
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107. Your firm is contemplating the purchase of a new $674,000 computer-based order entry system. The system will be dep
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Posted on 2016-02-03 03:34:50
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earnings: $1.10
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...th $58,000 at that time. You will save $185,000 before taxes per year in order processing costs, and you will be able to...
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