Consider a research study performed for a large retailer. The study deals with planning and implementation of improvements in product selection, ordering, transportation, distribution, placement, display, and e$-$marketing. The study involves a large consultancy, with much of the data gathering and analysis accomplished by two universities. The entire effort occurs during year $0$ and costs $$700,000.$ It yields an increase in before$-$tax revenue of $$160,000$ per year over $8$ years, with an additional $$100,000$ at the end of year $8$ due to sharing of results with less progressive companies that now want to learn better ways to do business themselves. Various media and sharing activities will accomplish this during year $8.$ The company's after$-$tax MARR is $12\%$ and its combined federal and state tax rate is $25\%.$ Nothing about this investment is depreciable.

Parta

Find the before$-$tax PW$,$ FW$,$ AW$,$ IRR, and ERR of this investment. Use the appropriate before$-$tax MARR.

Click here to access the TVM Factor Table calculator.