"An industrial engineer proposed the purchase of an RFID Ford Asset Tracking System for the company's warehouse and weave rooms. The engineer felt that the purchase would provide a better system of locating cartons in the warehouse by recording the locations of the cartons and storing the data in the computer. The estimated investment, annual operating and maintenance costs, and expected annual saving are as follows: Costof equipment and installation: $125.200 Project life: 5 years Expected salvage $22,000 Investment in working capital (fully recoverable at the end of the project life ):$27000 Expected annual savings on labor and materials $52700 Expected annual expenses: $6,800 Depreciation method :five year MACRS As a part of this project, the firm will take a loan of $29,000 to be repaid in three equal annual payments at 13.2% interest. The firm's marginal tax rate is 21%. Determine the IRR of the RFID system. Express your answer as a percentage rounded to the nearest tenth of a percent (ie, 83%should be entered as 8.3")
"An industrial engineer proposed the purchase of an RFID Ford Asset Tracking System for the company's warehouse and weave rooms. The engineer felt that the purchase would provide a better system of locating cartons in the warehouse by recording the locations of the cartons and storing the data in the computer. The estimated investment, annual operating and maintenance costs, and
expected annual saving are as follows:
Costof equipment and installation: $125.200
Project life: 5 years
Expected salvage $22,000
Investment in working capital (fully recoverable at the end of the project life ):$27000
Expected annual savings on labor and materials $52700
Expected annual expenses: $6,800
As a part of this project, the firm will take a loan of $29,000 to be repaid in three equal annual payments at 13.2% interest. The firm's marginal tax rate is 21%. Determine the
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