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Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below.

13. Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below.
The company owns the building that would be used, and it could sell it for $100,000 after taxes if it
decides not to open the new office. The equipment for the project has a 3 year class life and will be
depreciated by the MACRS depreciation system over the project's 4 year life, and it will have zero salvage
value at the end of the project. No new working capital will be required. What is the project's MIRR?
WACC 14.00%
Net equipment cost (depreciable basis) $90,000.00
Sales revenues, each year $125,000.00
Cash operating costs, each year $34,000.00
Marginal tax rate 25.00%

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