Your firm is contemplating the purchase of a new $605,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $89,000 at the end of that time. You will save $188,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $104,000 (this is a one-time reduction). If the tax rate is 21 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Snow Inc. has just completed development of a new cell phone. The new product is expected to produce annual revenues of $1,400,000. Producing the cell phone requires an investment in new equipment, costing $1,500,000. The cell phone has a projected life cycle of 5 years. After 5 years, the equipment can be sold for $180,000. Working capital is also expected to decrease by $200,000, which Snow will recover by the end of the new product’s life cycle. Annual cash operating expenses are estimated at $820,000. The required rate of return is 8%. 1. Calculate the NPV using only discount factors from the Present Value of a Single Amount table.  2. Calculate the NPV using discount factors from both tables (Single Amount and Present Value of an Annuity).

Your firm is contemplating the purchase of a new $500,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $40,000 at the end of that time. You will save $120,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $30,000 at the beginning of the project. Working capital will revert back to normal at the end of the project. If the tax rate is 35 percent, what is the IRR for this project? 7.85% 9.00% 7.04% 11.30%

Amazon is considering using high capacity drones that would make its product deliveries more efficient. For this project, $113,000 would need to be spent right away to buy the required fleet of drones. The drones will be losing their economic value in equal amount each year, fully over their 5-year economic lives. Once the drones' economic life is over, they would all be sold for $8,500 selling price to a new owner, and Amazon would then immediately purchase the same but brand-new drones for the same price as what it paid for the initial fleet of drones. When those drones' life is over, they would again be sold and, again, brand-new ones would be purchased - all for the same prices as for the initial drones, and so on, over and over. Additional information: • Amazon expects $9,200 in annual operating costs. • All future cash flows are year-end cash flows. ● Amazon pays 25 percent tax rate on all taxable income. Amazon requires an annual discount rate of 9 percent, and the rate is not…