A pharmacy has decided to automate its insurance claims process. Two networked computer systems are being considered. The systems have an expected life of 3 years. Herewith is the cash flows related to the project, the cash benefits represent the savings created by switching from manual to automated. Question: Which system would you choose and why? (Limit 5 sentences) System 1 P 200,000 75,000 75,000 System 2 P 215,000 Year Investment 1 2 3 75,000 420,000 The company's cost of capital is 10%.
A pharmacy has decided to automate its insurance claims process. Two networked computer systems are being considered. The systems have an expected life of 3 years. Herewith is the cash flows related to the project, the cash benefits represent the savings created by switching from manual to automated. Question: Which system would you choose and why? (Limit 5 sentences) System 1 P 200,000 75,000 75,000 System 2 P 215,000 Year Investment 1 2 3 75,000 420,000 The company's cost of capital is 10%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![A pharmacy has decided to automate its insurance claims process. Two
networked computer systems are being considered. The systems have an
expected life of 3 years. Herewith is the cash flows related to the project, the
cash benefits represent the savings created by switching from manual to
automated. Question: Which system would you choose and why? (Limit 5
sentences)
System 1
P 200,000
75,000
75,000
75,000
The company's cost of capital is 10%.
Year
Investment
System 2
P 215,000
1
2
3
420,000
Your answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6b54cd67-6c81-4f32-98c3-a953465dbcc4%2F1fbedd85-ad5c-481b-959c-3e5343847cb1%2F9jek0hh_processed.png&w=3840&q=75)
Transcribed Image Text:A pharmacy has decided to automate its insurance claims process. Two
networked computer systems are being considered. The systems have an
expected life of 3 years. Herewith is the cash flows related to the project, the
cash benefits represent the savings created by switching from manual to
automated. Question: Which system would you choose and why? (Limit 5
sentences)
System 1
P 200,000
75,000
75,000
75,000
The company's cost of capital is 10%.
Year
Investment
System 2
P 215,000
1
2
3
420,000
Your answer
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