A firm is considering purchasing a computer system the, Ask an Expert

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"A firm is considering purchasing a computer system. The following data has been collected.

- Cost of the system: $155,000

- Project life: 6 years

- Salvage value at the end of year 6: $22,000

- Depreciation method: five-year MACRS

- Tax rate: 40%

- Annual revenue from project: $130,000

- Annual expenses (not including depreciation): $93,000

The firm will borrow the entire $155,000 at 9% interest to be repaid in 2 annual payments.

The firm's MARR is 19%. Determine the IRR for the computer system. Enter your answer as a percentage between 0 and 100."

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92850292

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