Firm is contemplating the purchase of a new machine costing


Firm is contemplating the purchase of a new machine costing $570,000. The machine will be depreciated straight line to zero over its five-year life. It will be worth $58,000 at the end of that time. You will save $270,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $73,000 (one time reduction). The tax rate is 35%. What is the IRR for this project?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Firm is contemplating the purchase of a new machine costing
Reference No:- TGS01387073

Now Priced at $20 (50% Discount)

Recommended (91%)

Rated (4.3/5)