You will save 260000 before taxes per year in order


Your firm is thinking about the purchase of a new $630,000 mobile-compatible order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $70,000 at the end of that time. You will save $260,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $85,000 (this is a one-time reduction). If the tax rate is 30 percent, what is the IRR for this project.

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Finance Basics: You will save 260000 before taxes per year in order
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