Firm is considering purchasing computer system

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Reference no: EM132041014

"A firm is considering purchasing a computer system. -Cost of system is $150,000. The firm will pay for the computer system in year 0. -Project life: 6 years -Salvage value in year 0 (constant) dollars: $14,000 -Depreciation method: five-years MACRS -Marginal income-tax rate = 39% (remains constant over time) -Annual revenue = $146,000 (year-0 constant dollars) -Annual expenses (not including depreciation) = $98,000 (year-0 constant dollars) If the general inflation rate is 5.1% during the project period (which will affect all revenues, expenses, and the salvage value but not depreciation), determine the INFLATION-FREE IRR' of the computer system. Enter your answer as a percentage between 0 and 100."

Reference no: EM132041014

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