Question: IBM recently saved $250 million over three years by implementing supply chain software that reduced the cost of components used in its manufacture of computers.

IBM recently saved $250 million over three years by implementing supply chain software that reduced the cost of components used in its manufacture of computers. If we assume that the savings occurred equally over the three years and the cost of implementing the new software was $175,500,000, what would be the internal rate of return for this investment?

Use the present value of an annuity of $1 table found in Exhibit 2 in determining your answer.

Step by Step Solution

★★★★★

3.38 Rating (176 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Go to row three in Exhibit 2 In row three the column ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

142-B-A-F-A (898).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

IBM Corporation recently saved $250 million over three years by implementing supply chain software that reduced the cost of components used in its manufacture of computers. If we assume that the...

Determining the present value of an annuity Julia Rainy is considering whether to install a drink machine at the gas station she owns. Julia is convinced that providing a drink machine at the station...

Present value of an annuity Consider the following cases. a. Calculate the present value of the annuity assuming that it is (1) An ordinary annuity. (2) An annuity due. b. Compare your findings in...

=+El5-18 Internal rate ofreturn method Obj 2 IBM recently saved $250 million over three years by implementing supply chain software that reduced the cost of components used in its manufacture of...

The Great Inventory Correction John Chambers likened it to a 100-year flood, although the problem was dearth, not plenitude. The swift evaporation of technology demand that began in the latter part...

Can you continue making the VRIO framework and describe its resources and capabilities in the 4 functional areas of management? Resources Valuable Rare Inimitable Well-Organized 7-3 "By selling...

1. Make a PESTLE Analysis of Opportunities and Threats 2. Make a Porter's 5 Forces of Competitive Advantage 3. Make an EFE Matrix Analysis 4. Make an internal analysis sing the VRIO framework. 5....

Exercise one. 1. Let the market demand curve be P=1000 - 10Q. Assume the market is controlled by a monopolist. Let fixed cost be $10,000 and Marginal Costs (MC)=20Q. a) What is the profit maximizing...

i. Explain all the questions well. 1). The market demand function for a good is given by Q = D(p) = 800 50p. For each firm that produces the good the total cost function is TC(Q) = 4Q+( Q2/2) ....

Explain the questions well. 1). The market demand function for a good is given by Q = D(p) = 800 50p. For each firm that produces the good the total cost function is TC(Q) = 4Q+( Q2/2) . Recall that...

Ms. Ria has the following loans running in her name: a) Personal loan of $8,500, current balance outstanding on the loan is $8,100, total tenure of 48 months, paying an equated monthly installment of...

Tyler's Inc. makes soap. Tyler plans to produce 5000 soaps next month. 5000 soaps require 2600 tons of detergent at the cost of $13 a ton. Tyler also estimates the need for 8 workers to work 8 hours...

Bonds are issued to finance this type of asset.a . tangibleb . currentc. capitald. temporary

27. Ice Cream Recipes. McKinneys Sweet Shop specializes in homemade candies and ice cream. McKinneys produces its ice cream in house, in batches of 50 pounds. The first stage in ice cream making is...

Give an example of a transaction that results in: (a) A decrease in an asset and a decrease in a liability. (b) A decrease in one asset and an increase in another asset. (c) A decrease in one...

Do the following events represent business transactions? Explain your answer in each case. (a) A computer is purchased on account. (b) A customer returns merchandise and is given credit on account....

Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 5% paid annually. Assume you buy the bond at its face value of $1,000, and the inflation rate is 6%. What...

This question is meant to help clarify the example of the profit maximizing monopolist from the lecture notes. In particular, you have a monopolist that produces and sells a single good. Ultimately,...

You have the below information about the expected returns of Palantir Technologies and Valar Ventures for the coming year, which both heavily depend on the state of the economy: Economic State...