"A firm is undertaking a project with the following details provided. - The project costs $2.5 million...

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"A firm is undertaking a project with the following detailsprovided.

- The project costs $2.5 million and has a 7-year servicelife.

- It generates revenues of $560,000 annually.

- The project is classified as a 7-year property under the MACRSrule.
- At the end of year 7, any assets for the project will be sold.The expected salvage will be 18% of the initial $2.5M projectcost.

- The firm will finance 40% of the project money from an outsidesource with an interest rate of 12%. The firm is required to repaythe loan with 5 equal annual payments.

- The firm's tax rate is 21%.

- MARR is 16%.

Given this information, compute the IRR for this project. Enteryour answer as percentage rounded to the nearest tenth of a percent(i.e., 8.3% is entered as 8.3)."

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cost of system2500000Annual depreciationyearcost of machineMACRS rateAnnual See Answer

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"A firm is undertaking a project with the following detailsprovided.- The project costs $2.5 million and has a 7-year servicelife.- It generates revenues of $560,000 annually.- The project is classified as a 7-year property under the MACRSrule.- At the end of year 7, any assets for the project will be sold.The expected salvage will be 18% of the initial $2.5M projectcost.- The firm will finance 40% of the project money from an outsidesource with an interest rate of 12%. The firm is required to repaythe loan with 5 equal annual payments.- The firm's tax rate is 21%.- MARR is 16%.Given this information, compute the IRR for this project. Enteryour answer as percentage rounded to the nearest tenth of a percent(i.e., 8.3% is entered as 8.3)."