LaSalle Industries is considering the purchase of a new strapping machine, which will cost $150,000. The new machine will have a 5-year useful life and will be depreciated to zero using the straight-line method. The machine is expected to generate new sales of $45,000 per year and is expected to have $6,000 annual cost over the next 5-years. LaSalle's income tax rate is 35%. What is the machine's IRR? 26. IBM expects to pay a dividend of $5 next year and expects these dividends to grow at 7% a year. The price of IBM is $90 per share. What is IBM's cost of equity capital?