After a long drought, the manager of Long Branch Farm is considering the installation of an irrigation system which will cost R100,000.It is estimated that the irrigation system will increase revenues by R20,500 annually, although operating expenses other than depreciation will also increase by R5,000.The system will be depreciated using MACRS over its depreciable life (5 years) to a zero salvage value.If the tax rate on ordinary income is 40 percent, what is the project's IRR?

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The Answer of After a long drought, the manager of Long Branch Farm is considering the installation of an irrigation system which will cost R100,000.It is estimated that the irrigation system will increase revenues by R20,500 annually, although operating expenses other than depreciation will also increase by R5,000.The system will be depreciated using MACRS over its depreciable life (5 years) to a zero salvage value.If the tax rate on ordinary income is 40 percent, what is the project's IRR?

After a Long Drought, the Manager of Long Branch Farm