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Your firm is contemplating the purchase of a new $615,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $67,000 at the end of that time. You will save $245,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $82,000 (this is a one-time reduction). If the tax rate is 30 percent,

Required:

Question 1: What is the IRR for this project?

Note: Explain in detail.

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Category:- Basic Finance
Reference No.:- M91147661

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