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

- Cost of the system: $172,000

- Project life: 6 years

- Salvage value at the end of year 6: $16,000

- Depreciation method: five-year MACRS

- Tax rate: 39%

- Annual revenue from project: $142,000

- Annual expenses (not including depreciation): $92,000

The firm will borrow the entire $172,000 at 5.8% interest to be repaid in 2 annual payments.

The firm's MARR is 12%. Determine the IRR for the computer system. Enter your answer as a percentage between 0 and 100."

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92853779

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