Firm purchases non-deprecated asset

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Reference no: EM131084244

A firm purchases a non-deprecated asset at year 0 for price P and receives constant annual revenue A in actual dollars for 10 years at the year 10 the asset is sold for the same price P. revenue increase with asset's price P. Revenue increase with asset price according to the law A(P)=rP-0.1-0.001R^2. Where r=0.1. The tax bracket is $28, inflation rate is 1.8% and a range assets with prices P>0 is available for purchase what is the maximal internal rate of return in real dollars the firm can achieve by choosing the optimal asset price? (Provide your answer as a percentage of 0.1 precision.

Reference no: EM131084244

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