Question
A firm is considering purchasing a computer system. The following data has been collected. - Cost of the system: $136,000 - Project life: 6 years
A firm is considering purchasing a computer system. The following data has been collected. - Cost of the system: $136,000 - 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: $112,000 - Annual expenses (not including depreciation): $83,000 The firm will borrow the entire $136,000 at 6.9% 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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