Determine the irr for computer system

Assignment Help Financial Management

Reference no: EM131918631

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.

Reference no: EM131918631

Questions Cloud

Human resource retention-performance and attitudes : What advice would Pikula provide Nardelli about how he might have approached his organizational change initiative differently

Center-of-gravity location using center-of-gravity : Calculate the X-coordinate of the center-of-gravity location using the center-of-gravity technique. (Round value to nearest integer)

Whats this advanced information systems management business : Which are the three most Critical Issues of this Advanced Information Systems Management Business Case? Please explain why?

Operations strategies to fit dynamic-unpredictable economies : In Today's turbulent markets, international companies strive to dynamically change their operations strategies to fit the dynamic and unpredictable economies.

Determine the irr for computer system : The firm's MARR is 19%. Determine the IRR for the computer system. Enter your answer as a percentage between 0 and 100.

Firm has set up revolving credit agreement : If a firm has set up a revolving credit agreement with a bank, the risk to the firm of being unable to obtain funds.

Aspect of airport security in terms of technology : Conduct an article research regarding an aspect of airport security in terms of technology, issues, human factors, legalities etc.

Permanent current assets and seasonal current assets : Conservative financing approach to working capital will result in permanent current assets and seasonal current assets being financed using long-term securities

Weakest link in the security chain : People are often called the weakest link in the security chain. What technical or non-technical methods can be used to counteract this threat?

User Account

All Pages