Your friend is studying the feasibility for opening a new company. He / She provides you with the below table indicating the costs and the benefits for the system on 4 years, with a discount factor of 11%. Calculate the Present Value (PV) for each year and fill the table. Given the formula to calculate the PV: PV. = 1/(1 + ir where n is the number of years and i is the discount rate. Calculate the NET Present Value Year Discount factor 11% Development (S50,000.00) costs Operation Costs (S30,000.00) (S60,000.00) (S90,000.00) (S100,000.00) Present value Costs Total Present Value of lifetime costs Annual benefits S100,000.00 $0.00 $90,000.00 $125,000.00 S170,000.00 Present value benefits Total Present value of lifetime benefits Total Present value of lifetime

Database System Concepts
7th Edition
ISBN:9780078022159
Author:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Publisher:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Chapter1: Introduction
Section: Chapter Questions
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Your friend is studying the feasibility for opening a new company. He / She provides you with
the below table indicating the costs and the benefits for the system on 4 years, with a discount
factor of 11%.
Calculate the Present Value (PV) for each year and fill the table. Given the formula to calculate
the PV:
PV. = 1/(1 + ir where n is the number of years and i is the discount rate.
Calculate the NET Present Value
Year
Discount factor
11%
Development
(S50,000.00)
costs
Operation Costs
(S60,000.00)
(S30,000.00)
(S90,000.00)
(SI00,000.00)
Present value
Costs
Total Present
Value of
lifetime costs
Annual benefits
S100,000.00
$0.00
$90,000.00
$125,000.00
S170,000.00
Present value
benefits
Total Present
value of
lifetime benefits
Total Present
value of
lifetime
Transcribed Image Text:Your friend is studying the feasibility for opening a new company. He / She provides you with the below table indicating the costs and the benefits for the system on 4 years, with a discount factor of 11%. Calculate the Present Value (PV) for each year and fill the table. Given the formula to calculate the PV: PV. = 1/(1 + ir where n is the number of years and i is the discount rate. Calculate the NET Present Value Year Discount factor 11% Development (S50,000.00) costs Operation Costs (S60,000.00) (S30,000.00) (S90,000.00) (SI00,000.00) Present value Costs Total Present Value of lifetime costs Annual benefits S100,000.00 $0.00 $90,000.00 $125,000.00 S170,000.00 Present value benefits Total Present value of lifetime benefits Total Present value of lifetime
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