(a) Compute the actual IRR

(b) Compute the real IRR (without inflation)

(c) Compute the PV in actual dollars discounted at the 15% actual rate

(d) Compute the PV in real dollars discounted at the real interest rate

4. A large corporation subjected to 35% tax is investing in a new income producing asset that is depreciated on a MACRS 3 year schedule. The full price of the asset is 250,000 but the asset will be financed at an interest rate of 8.00% over 5 years after a down payment of 150,000 . The expected revenue and costs in constant dollars (year 0 ) by year are given below. Based on historical costs, the expected inflation of costs is expected to be 3.0%. Note that is inflation does not apply to finance costs of principal and interest payments. When retired, the asset will have no value. The firm's MARR is 15% in real dollars. 4. A large corporation subjected to 35% tax is investing in a new income producing asset that is depreciated on a MACRS 3 year schedule. The full price of the asset is 250,000 but the asset will be financed at an interest rate of 8.00% over 5 years after a down payment of 150,000 . The expected revenue and costs in constant dollars (year 0 ) by year are given below. Based on historical costs, the expected inflation of costs is expected to be 3.0%. Note that is inflation does not apply to finance costs of principal and interest payments. When retired, the asset will have no value. The firm's MARR is 15% in real dollars