Firm is considering purchasing computer system

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Reference no: EM132015970

"A firm is considering purchasing a computer system. The following data has been collected.

- Cost of the system: $125,000

- Project life: 6 years

- Salvage value at the end of year 6: $18,000

- Depreciation method: five-year MACRS

- Tax rate: 33%

- Annual revenue from project: $109,000

- Annual expenses (not including depreciation): $88,000

The firm will borrow the entire $125,000 at 5.3% interest to be repaid in 2 annual payments.

The firm's MARR is 15%. Determine the IRR for the computer system. Enter your answer as a percentage between 0 and 100."

Reference no: EM132015970

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