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?
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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