A new computer system will require an initial outlay of $20,000, but it will increase the firm's cash flows by $4,300 a year for each of the next 8 years. Calculate the NPV and decide if the system is worth installing if the required rate of return is 9%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Calculate the NPV and decide if the system is worth installing if the required rate of return is 14%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. How high can the discount rate be before you would reject the project? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
A new computer system will require an initial outlay of $20,000, but it will increase the firm's cash flows by $4,300 a year for each of the next 8 years. Calculate the NPV and decide if the system is worth installing if the required rate of return is 9%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Calculate the NPV and decide if the system is worth installing if the required rate of return is 14%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. How high can the discount rate be before you would reject the project? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
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 $20,000, but it will increase the firm's cash flows by $4,300 a year
for each of the next 8 years. Calculate the NPV and decide if the system is worth installing if the required rate of return is
9%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your
answers to 2 decimal places. Calculate the NPV and decide if the system is worth installing if the required rate of return is
14%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your
answers to 2 decimal places. How high can the discount rate be before you would reject the project? Note: Do not round
intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1bc1a8ad-8e23-4cba-93cb-9ef3ca0e13a9%2F73c9470f-5973-4eb6-9c81-8a7063ef6acd%2Fafhlhcp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A new computer system will require an initial outlay of $20,000, but it will increase the firm's cash flows by $4,300 a year
for each of the next 8 years. Calculate the NPV and decide if the system is worth installing if the required rate of return is
9%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your
answers to 2 decimal places. Calculate the NPV and decide if the system is worth installing if the required rate of return is
14%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your
answers to 2 decimal places. How high can the discount rate be before you would reject the project? Note: Do not round
intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
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