A new computer system will require an initial outlay of $16.250, but it will increase the firm's cash flows by $3,900 a year for each of the next a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 8% Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Net present value Worth installing Yes b. Calculate the NPV and decide if the system is worth installing if the required rate of return is 13% Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Net present value Worth instaring
A new computer system will require an initial outlay of $16.250, but it will increase the firm's cash flows by $3,900 a year for each of the next a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 8% Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Net present value Worth installing Yes b. Calculate the NPV and decide if the system is worth installing if the required rate of return is 13% Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Net present value Worth instaring
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A new computer system will require an initial outlay of $16.250, but it will increase the firm's cash flows by $3,900 a year for each of
the next 6 years
a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 8%.
Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to
2 decimal places.
Net present value
Worth instaling
Yes
b. Calculate the NPV and decide if the system is worth installing if the required rate of return is 13%
Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to
2 decimal places.
Net present value
Worth inslaring
No
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