What are the NPV and IRR for project

Assignment Help Financial Management

Reference no: EM131838607

Your firm is contemplating the purchase of a new $700,000 order entry system. The system has an expected 4-year useful life. It will be worth $40,000 at the end of that time. The machine will be depreciated according to the 3-year Modified Accelerated Cost Recovery System (MACRS). You will save $240,000 before taxes per year in order processing costs and you will be able to reduce working capital by $80,000 (this is a one-time reduction). If the tax rate is 35 percent and cost of capital is 12%, what are the NPV and IRR for this project?

Reference no: EM131838607

Questions Cloud

High standards and communicate sympathetically : Authoritative" parents who set high standards and communicate sympathetically tend to have well-behaved children.

Development of products that can be used in the schools : 1. Is directed at the cdevelopment of products that can be used in the schools. 2. Is concerned with immediate solutions to real problems.

What is cognitive dissonance : What is cognitive dissonance and how is it used within everyday life?

Understanding language in a social context : Find at least three peer-reviewed research articles that help you understanding language in a social context.

What are the NPV and IRR for project : Your firm is contemplating the purchase of a new $700,000 order entry system. what are the NPV and IRR for this project?

Find cost of goods sold for the last month : MM Retail Store the available for sales $180,000 Ending inventory 20% of Cost of goods sold. Find cost of goods sold for the last month

Important aspect of leadership : Reflecting on the traits, skills and characteristics described in the text, which do you think is the most important aspect of leadership?

What you find relevant and interesting about the examples : Write a few sentences explaining why you have picked these examples, what you find relevant and interesting about these examples.

What was level of retained earnings on the company : What was the level of retained earnings on the company's December 31, 2008 balance sheet?

User Account

All Pages