The firm will repay the loan with 3 equal annual payments


"A computer manufacturing company is considering a retooling project with the following finanical information. The project costs $0.682 million and has a 3-year service life. The project will earn $393,000 in additional revenue per year and cost $41,000 in additional expenses per year. The retooling project can be classified as a seven-year property under the MACRS rule. At the end of year 3, any assets held for the project will be sold. The salvage value will be $75,000. The firm will borrow $341,000 for the project at an interest rate of 12%. The firm will repay the loan with 3 equal annual payments. The firm's tax rate is 35%. Compute the internal rate of return for this project. Express your answer as a percentage. Note: the IRR could be a negative number depending on which version of the question you receive."

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Financial Management: The firm will repay the loan with 3 equal annual payments
Reference No:- TGS02351689

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