Your firm buys a new equipment for Rs. 80,000. It will give your firm annual savings of Rs. 27,000, for six years, with zero salvage value. It is to be depreciated by the SL method over four years, with placement at the start of the first year. Tax rate will be 12%. However, you decide to sell it early at the end of the third year, for Rs. 23,000. Calculate the after-tax IRR for this?
To open the "IRR function" window - MS-Excel --> Formulas --> Financials --> IRR.
The formulation is shown:
The calculation is shown: