Transcribed Image Text
A company is considering the purchase of a $200,000computer-based inventory management system. It will be depreciatedstraight-line to zero over its four-year life. It will be worth$30,000 at the end of that time. The system will save $60,000before taxes in inventory-related costs. The relevant tax rate is39%. Because the new setup is more efficient than the existing one,the company will be able to carry fewer inventories and thus freeup $45,000 in net working capital. What is the NPV at 16%? What isthe DCF return (the IRR) on this investment? What is the MIRR?
Other questions asked by students
Q
What is the value per share be of a company with the following dividends? Dividend just paid is...
Finance
Q
Corporations are the dominant social institution of our day. It is an institution created by the...
Psychology
Advance Math
Biology
Accounting