SlideShare a Scribd company logo
1 of 1
Download to read offline
In the previous problem, suppose your required return on the project is 11 percent and your pretax
cost savings are $150,000 per year. Will you accept the project? What if the pretax cost savings
are only $100,000 per year?---------------------------------------------------------------------------------------------
----------Previous question - Your firm is contemplating the purchase of a new $535,000 computer
based order entry system. The system will be depreciated straight-line to zero over its five-year
life. It will be worth $30,000 at the end of that time. You will save $165,000 before taxes per year
in order processing costs, and you will be able to reduce working capital by $60,000 at the
beginning of the project. Working capital will revert back to normal at the end of the project. If the
tax rate is 24 percent, what is the IRR for this project?

More Related Content

More from adithiyaatextile

In the following exercise we use data from HollywoodMovies.pdf
In the following exercise we use data from HollywoodMovies.pdfIn the following exercise we use data from HollywoodMovies.pdf
In the following exercise we use data from HollywoodMovies.pdfadithiyaatextile
 
In the movie Austin Powers International Man of Mystery a.pdf
In the movie Austin Powers International Man of Mystery a.pdfIn the movie Austin Powers International Man of Mystery a.pdf
In the movie Austin Powers International Man of Mystery a.pdfadithiyaatextile
 
In the past Ethernets predominantly used a medium access co.pdf
In the past Ethernets predominantly used a medium access co.pdfIn the past Ethernets predominantly used a medium access co.pdf
In the past Ethernets predominantly used a medium access co.pdfadithiyaatextile
 
In the initial Cournot oligopoly equilibrium both firms hav.pdf
In the initial Cournot oligopoly equilibrium both firms hav.pdfIn the initial Cournot oligopoly equilibrium both firms hav.pdf
In the initial Cournot oligopoly equilibrium both firms hav.pdfadithiyaatextile
 
In the fruit fly Drosophila a spineless no wing bristles.pdf
In the fruit fly Drosophila a spineless no wing bristles.pdfIn the fruit fly Drosophila a spineless no wing bristles.pdf
In the fruit fly Drosophila a spineless no wing bristles.pdfadithiyaatextile
 
In the implementation of the ordinary Queue if the dequeue .pdf
In the implementation of the ordinary Queue if the dequeue .pdfIn the implementation of the ordinary Queue if the dequeue .pdf
In the implementation of the ordinary Queue if the dequeue .pdfadithiyaatextile
 
In the formula IPAT which of the following would be repres.pdf
In the formula IPAT which of the following would be repres.pdfIn the formula IPAT which of the following would be repres.pdf
In the formula IPAT which of the following would be repres.pdfadithiyaatextile
 
In the game Sorry players draw a card and move around the.pdf
In the game Sorry players draw a card and move around the.pdfIn the game Sorry players draw a card and move around the.pdf
In the game Sorry players draw a card and move around the.pdfadithiyaatextile
 
In the following web login system Assuming that the applica.pdf
In the following web login system Assuming that the applica.pdfIn the following web login system Assuming that the applica.pdf
In the following web login system Assuming that the applica.pdfadithiyaatextile
 
In the following table provide a short explanation of how ea.pdf
In the following table provide a short explanation of how ea.pdfIn the following table provide a short explanation of how ea.pdf
In the following table provide a short explanation of how ea.pdfadithiyaatextile
 
In the field of anthropology primatology and genetics ther.pdf
In the field of anthropology primatology and genetics ther.pdfIn the field of anthropology primatology and genetics ther.pdf
In the field of anthropology primatology and genetics ther.pdfadithiyaatextile
 
In the film The Ghosts of Stonehenge it is suggested that.pdf
In the film The Ghosts of Stonehenge it is suggested that.pdfIn the film The Ghosts of Stonehenge it is suggested that.pdf
In the film The Ghosts of Stonehenge it is suggested that.pdfadithiyaatextile
 
In the fall of 2021 the United States enacted a 12 trilli.pdf
In the fall of 2021 the United States enacted a 12 trilli.pdfIn the fall of 2021 the United States enacted a 12 trilli.pdf
In the fall of 2021 the United States enacted a 12 trilli.pdfadithiyaatextile
 
In the early 2000s manatee numbers in Florida were hoverin.pdf
In the early 2000s manatee numbers in Florida were hoverin.pdfIn the early 2000s manatee numbers in Florida were hoverin.pdf
In the early 2000s manatee numbers in Florida were hoverin.pdfadithiyaatextile
 
In the 1960s the Supreme Court of Chief Justice Earl Warren.pdf
In the 1960s the Supreme Court of Chief Justice Earl Warren.pdfIn the 1960s the Supreme Court of Chief Justice Earl Warren.pdf
In the 1960s the Supreme Court of Chief Justice Earl Warren.pdfadithiyaatextile
 
In Python I am struggling with getting the functions to wor.pdf
In Python I am struggling with getting the functions to wor.pdfIn Python I am struggling with getting the functions to wor.pdf
In Python I am struggling with getting the functions to wor.pdfadithiyaatextile
 
In the Bully leader election algorithm if a process receive.pdf
In the Bully leader election algorithm if a process receive.pdfIn the Bully leader election algorithm if a process receive.pdf
In the Bully leader election algorithm if a process receive.pdfadithiyaatextile
 
In silkmoths Bombyx mori red eyes re and whitebanded w.pdf
In silkmoths Bombyx mori red eyes re and whitebanded w.pdfIn silkmoths Bombyx mori red eyes re and whitebanded w.pdf
In silkmoths Bombyx mori red eyes re and whitebanded w.pdfadithiyaatextile
 
In the article Incorporating Country Risk in the Valuation .pdf
In the article Incorporating Country Risk in the Valuation .pdfIn the article Incorporating Country Risk in the Valuation .pdf
In the article Incorporating Country Risk in the Valuation .pdfadithiyaatextile
 
In our projects on the significant events in Operations Mana.pdf
In our projects on the significant events in Operations Mana.pdfIn our projects on the significant events in Operations Mana.pdf
In our projects on the significant events in Operations Mana.pdfadithiyaatextile
 

More from adithiyaatextile (20)

In the following exercise we use data from HollywoodMovies.pdf
In the following exercise we use data from HollywoodMovies.pdfIn the following exercise we use data from HollywoodMovies.pdf
In the following exercise we use data from HollywoodMovies.pdf
 
In the movie Austin Powers International Man of Mystery a.pdf
In the movie Austin Powers International Man of Mystery a.pdfIn the movie Austin Powers International Man of Mystery a.pdf
In the movie Austin Powers International Man of Mystery a.pdf
 
In the past Ethernets predominantly used a medium access co.pdf
In the past Ethernets predominantly used a medium access co.pdfIn the past Ethernets predominantly used a medium access co.pdf
In the past Ethernets predominantly used a medium access co.pdf
 
In the initial Cournot oligopoly equilibrium both firms hav.pdf
In the initial Cournot oligopoly equilibrium both firms hav.pdfIn the initial Cournot oligopoly equilibrium both firms hav.pdf
In the initial Cournot oligopoly equilibrium both firms hav.pdf
 
In the fruit fly Drosophila a spineless no wing bristles.pdf
In the fruit fly Drosophila a spineless no wing bristles.pdfIn the fruit fly Drosophila a spineless no wing bristles.pdf
In the fruit fly Drosophila a spineless no wing bristles.pdf
 
In the implementation of the ordinary Queue if the dequeue .pdf
In the implementation of the ordinary Queue if the dequeue .pdfIn the implementation of the ordinary Queue if the dequeue .pdf
In the implementation of the ordinary Queue if the dequeue .pdf
 
In the formula IPAT which of the following would be repres.pdf
In the formula IPAT which of the following would be repres.pdfIn the formula IPAT which of the following would be repres.pdf
In the formula IPAT which of the following would be repres.pdf
 
In the game Sorry players draw a card and move around the.pdf
In the game Sorry players draw a card and move around the.pdfIn the game Sorry players draw a card and move around the.pdf
In the game Sorry players draw a card and move around the.pdf
 
In the following web login system Assuming that the applica.pdf
In the following web login system Assuming that the applica.pdfIn the following web login system Assuming that the applica.pdf
In the following web login system Assuming that the applica.pdf
 
In the following table provide a short explanation of how ea.pdf
In the following table provide a short explanation of how ea.pdfIn the following table provide a short explanation of how ea.pdf
In the following table provide a short explanation of how ea.pdf
 
In the field of anthropology primatology and genetics ther.pdf
In the field of anthropology primatology and genetics ther.pdfIn the field of anthropology primatology and genetics ther.pdf
In the field of anthropology primatology and genetics ther.pdf
 
In the film The Ghosts of Stonehenge it is suggested that.pdf
In the film The Ghosts of Stonehenge it is suggested that.pdfIn the film The Ghosts of Stonehenge it is suggested that.pdf
In the film The Ghosts of Stonehenge it is suggested that.pdf
 
In the fall of 2021 the United States enacted a 12 trilli.pdf
In the fall of 2021 the United States enacted a 12 trilli.pdfIn the fall of 2021 the United States enacted a 12 trilli.pdf
In the fall of 2021 the United States enacted a 12 trilli.pdf
 
In the early 2000s manatee numbers in Florida were hoverin.pdf
In the early 2000s manatee numbers in Florida were hoverin.pdfIn the early 2000s manatee numbers in Florida were hoverin.pdf
In the early 2000s manatee numbers in Florida were hoverin.pdf
 
In the 1960s the Supreme Court of Chief Justice Earl Warren.pdf
In the 1960s the Supreme Court of Chief Justice Earl Warren.pdfIn the 1960s the Supreme Court of Chief Justice Earl Warren.pdf
In the 1960s the Supreme Court of Chief Justice Earl Warren.pdf
 
In Python I am struggling with getting the functions to wor.pdf
In Python I am struggling with getting the functions to wor.pdfIn Python I am struggling with getting the functions to wor.pdf
In Python I am struggling with getting the functions to wor.pdf
 
In the Bully leader election algorithm if a process receive.pdf
In the Bully leader election algorithm if a process receive.pdfIn the Bully leader election algorithm if a process receive.pdf
In the Bully leader election algorithm if a process receive.pdf
 
In silkmoths Bombyx mori red eyes re and whitebanded w.pdf
In silkmoths Bombyx mori red eyes re and whitebanded w.pdfIn silkmoths Bombyx mori red eyes re and whitebanded w.pdf
In silkmoths Bombyx mori red eyes re and whitebanded w.pdf
 
In the article Incorporating Country Risk in the Valuation .pdf
In the article Incorporating Country Risk in the Valuation .pdfIn the article Incorporating Country Risk in the Valuation .pdf
In the article Incorporating Country Risk in the Valuation .pdf
 
In our projects on the significant events in Operations Mana.pdf
In our projects on the significant events in Operations Mana.pdfIn our projects on the significant events in Operations Mana.pdf
In our projects on the significant events in Operations Mana.pdf
 

Recently uploaded

Beyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global ImpactBeyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global ImpactPECB
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxiammrhaywood
 
BAG TECHNIQUE Bag technique-a tool making use of public health bag through wh...
BAG TECHNIQUE Bag technique-a tool making use of public health bag through wh...BAG TECHNIQUE Bag technique-a tool making use of public health bag through wh...
BAG TECHNIQUE Bag technique-a tool making use of public health bag through wh...Sapna Thakur
 
1029 - Danh muc Sach Giao Khoa 10 . pdf
1029 -  Danh muc Sach Giao Khoa 10 . pdf1029 -  Danh muc Sach Giao Khoa 10 . pdf
1029 - Danh muc Sach Giao Khoa 10 . pdfQucHHunhnh
 
The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13Steve Thomason
 
9548086042 for call girls in Indira Nagar with room service
9548086042  for call girls in Indira Nagar  with room service9548086042  for call girls in Indira Nagar  with room service
9548086042 for call girls in Indira Nagar with room servicediscovermytutordmt
 
Activity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfActivity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfciinovamais
 
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...EduSkills OECD
 
Sanyam Choudhary Chemistry practical.pdf
Sanyam Choudhary Chemistry practical.pdfSanyam Choudhary Chemistry practical.pdf
Sanyam Choudhary Chemistry practical.pdfsanyamsingh5019
 
Interactive Powerpoint_How to Master effective communication
Interactive Powerpoint_How to Master effective communicationInteractive Powerpoint_How to Master effective communication
Interactive Powerpoint_How to Master effective communicationnomboosow
 
The basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptxThe basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptxheathfieldcps1
 
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...Krashi Coaching
 
Z Score,T Score, Percential Rank and Box Plot Graph
Z Score,T Score, Percential Rank and Box Plot GraphZ Score,T Score, Percential Rank and Box Plot Graph
Z Score,T Score, Percential Rank and Box Plot GraphThiyagu K
 
Student login on Anyboli platform.helpin
Student login on Anyboli platform.helpinStudent login on Anyboli platform.helpin
Student login on Anyboli platform.helpinRaunakKeshri1
 
BASLIQ CURRENT LOOKBOOK LOOKBOOK(1) (1).pdf
BASLIQ CURRENT LOOKBOOK  LOOKBOOK(1) (1).pdfBASLIQ CURRENT LOOKBOOK  LOOKBOOK(1) (1).pdf
BASLIQ CURRENT LOOKBOOK LOOKBOOK(1) (1).pdfSoniaTolstoy
 
Advanced Views - Calendar View in Odoo 17
Advanced Views - Calendar View in Odoo 17Advanced Views - Calendar View in Odoo 17
Advanced Views - Calendar View in Odoo 17Celine George
 
Measures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and ModeMeasures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and ModeThiyagu K
 
Measures of Dispersion and Variability: Range, QD, AD and SD
Measures of Dispersion and Variability: Range, QD, AD and SDMeasures of Dispersion and Variability: Range, QD, AD and SD
Measures of Dispersion and Variability: Range, QD, AD and SDThiyagu K
 

Recently uploaded (20)

Beyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global ImpactBeyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global Impact
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
 
BAG TECHNIQUE Bag technique-a tool making use of public health bag through wh...
BAG TECHNIQUE Bag technique-a tool making use of public health bag through wh...BAG TECHNIQUE Bag technique-a tool making use of public health bag through wh...
BAG TECHNIQUE Bag technique-a tool making use of public health bag through wh...
 
1029 - Danh muc Sach Giao Khoa 10 . pdf
1029 -  Danh muc Sach Giao Khoa 10 . pdf1029 -  Danh muc Sach Giao Khoa 10 . pdf
1029 - Danh muc Sach Giao Khoa 10 . pdf
 
The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13
 
9548086042 for call girls in Indira Nagar with room service
9548086042  for call girls in Indira Nagar  with room service9548086042  for call girls in Indira Nagar  with room service
9548086042 for call girls in Indira Nagar with room service
 
Activity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfActivity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdf
 
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
 
Sanyam Choudhary Chemistry practical.pdf
Sanyam Choudhary Chemistry practical.pdfSanyam Choudhary Chemistry practical.pdf
Sanyam Choudhary Chemistry practical.pdf
 
Interactive Powerpoint_How to Master effective communication
Interactive Powerpoint_How to Master effective communicationInteractive Powerpoint_How to Master effective communication
Interactive Powerpoint_How to Master effective communication
 
The basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptxThe basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptx
 
Advance Mobile Application Development class 07
Advance Mobile Application Development class 07Advance Mobile Application Development class 07
Advance Mobile Application Development class 07
 
Código Creativo y Arte de Software | Unidad 1
Código Creativo y Arte de Software | Unidad 1Código Creativo y Arte de Software | Unidad 1
Código Creativo y Arte de Software | Unidad 1
 
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
 
Z Score,T Score, Percential Rank and Box Plot Graph
Z Score,T Score, Percential Rank and Box Plot GraphZ Score,T Score, Percential Rank and Box Plot Graph
Z Score,T Score, Percential Rank and Box Plot Graph
 
Student login on Anyboli platform.helpin
Student login on Anyboli platform.helpinStudent login on Anyboli platform.helpin
Student login on Anyboli platform.helpin
 
BASLIQ CURRENT LOOKBOOK LOOKBOOK(1) (1).pdf
BASLIQ CURRENT LOOKBOOK  LOOKBOOK(1) (1).pdfBASLIQ CURRENT LOOKBOOK  LOOKBOOK(1) (1).pdf
BASLIQ CURRENT LOOKBOOK LOOKBOOK(1) (1).pdf
 
Advanced Views - Calendar View in Odoo 17
Advanced Views - Calendar View in Odoo 17Advanced Views - Calendar View in Odoo 17
Advanced Views - Calendar View in Odoo 17
 
Measures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and ModeMeasures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and Mode
 
Measures of Dispersion and Variability: Range, QD, AD and SD
Measures of Dispersion and Variability: Range, QD, AD and SDMeasures of Dispersion and Variability: Range, QD, AD and SD
Measures of Dispersion and Variability: Range, QD, AD and SD
 

In the previous problem suppose your required return on the.pdf

  • 1. In the previous problem, suppose your required return on the project is 11 percent and your pretax cost savings are $150,000 per year. Will you accept the project? What if the pretax cost savings are only $100,000 per year?--------------------------------------------------------------------------------------------- ----------Previous question - Your firm is contemplating the purchase of a new $535,000 computer based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $30,000 at the end of that time. You will save $165,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $60,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. If the tax rate is 24 percent, what is the IRR for this project?