If tax rate is 34 percent what is the irr for this project

Assignment Help Finance Basics
Reference no: EM131054157

Your firm is contemplating the purchase of a new $575,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $59,000 at the end of that time. You will save $265,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $74,000 (this is a one-time reduction). If the tax rate is 34 percent, what is the IRR for this project 

Reference no: EM131054157

Questions Cloud

Observe the investment performance : Suppose you observe the investment performance of 800 portfolio managers and rank them by investment returns during the year. Sixteen percent of all managers are truly skilled, and therefore always fall in the top half, but the others fall in the ..
How they can be represented in an er schema diagram : how they can be represented in an ER schema diagram.
What is their equity disregarding appreciation after 5 year : The Taylors have purchased a $190,000 house. They made an initial down payment of $30,000 and secured a mortgage with interest charged at the rate of 8%/year on the unpaid balance. Interest computations are made at the end of each month. If the loan ..
Importance of accounting in identifying operational needs : Accounting practices and principles are at the heart of a manager's role. To understand the needs of operating a department, it is necessary to understand the importance of accounting in identifying operational needs.
If tax rate is 34 percent what is the irr for this project : Your firm is contemplating the purchase of a new $575,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $59,000 at the end of that time. You will save $265,000 before..
Investing and financing activities : Purely in your words, define and discuss the differences between operating, investing and financing activities. This should be done in APA format and essay. db thread 200 words.
Define value at risk : 1. Define Value at Risk 2. Summarize the strengths of VaR as a risk management tool. 3. Summarize the weaknesses of VaR.
Pointer control to read data in fixed columns : 1. When using pointer control to read data in fixed columns, the _____ symbol moves the pointer to a specific column? This method is considered _____________ pointer control.
Purchase price for existing stockholders : What will be the new purchase price for the existing stockholders? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reviews

Write a Review

Finance Basics Questions & Answers

  Write either a short paper sp related to behavioral finance

write either a short paper sp related to behavioral finance or a corporate report cr related to behavioral finance.

  Describe the role hrm plays in orientation

1. Describe the role HRM plays in orientation. 2. What kinds of signals can warn a manager that employee training may be necessary?

  What is the maximum debt ratio the firm can use

It can borrow at a rate of 7.5%, but the bank requires it to have a TIE of at least 4.0, and if the TIE falls below this level the bank will call in the loan and the firm will go bankrupt. What is the maximum debt ratio the firm can use?

  What is the risk structure of interest rates

What is the risk structure of interest rates? And, what are the three major components that are included.

  Best practice still effective

Best practice still effective

  How would you describe a ratio analysis

How would you describe a ratio analysis? Is each of its components necessary? Which of the figures would you identify as being more beneficial for the general manager of a major hotel? Why are these figures so important?

  Determining the bonds-duration

An insurance company is analyzing three bonds and is using duration as the measure of interest rate risk. What is the duration for each of the bonds? What is the relationship between duration and the amount of coupon interest that is paid?

  Computation of cost of capital

Computation of cost of capital and compute the cost of capital of investing in a project with a beta of 0.8

  Application of capital asset pricing model

Describe what you think is the main 'message' of the Capital Asset Pricing Model to corporations and what is the main message of CAPM to investors?

  Afb inc requires an investment in equipment of 600000 to

afb inc. requires an investment in equipment of 600000 to replace existing equipment. the existing equipment will

  What is the expected capital gains yield

The next dividend by mosby, inc will be $2.85 per share. the dividends are anticipated to maintain a 7.50 percent growth rate, forever. assume the stock currently sells for $49.30 per share. What is the dividend yield? what is the expected capital..

  Describe the different ways in which capital can be

describe the different ways in which capital can be transferred from suppliers of capital to those who are demanding

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd