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(30 marks) An company uses a technology which it purchased for $15 million. Operating costs are $2 million per year, and revenues of $7.3 million.
(30 marks) An company uses a technology which it purchased for $15 million. Operating costs are $2 million per year, and revenues of $7.3 million. The service life of the technology is 5 years and salvage value i: $2 million. The corporate tax rate is 25%. Calculate the after-tax IRR using the approximate approach. b) If the after-tax MARR is 15%, is this a good investment? c) Should you do a more precise IRR calculation before finalizing your decision? Briefly explain why or why not
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