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1. A financial manager is considering upgrading a firm's IT system. Two systems are under consideration: A fast system and a slow system. a. The

1. A financial manager is considering upgrading a firm's IT system. Two systems are under consideration: A fast system and a slow system.

a. The fast IT system will improve cashflows by $392,000 at the end of every year over three years and costs $821,000 today. What is the NPV of the fast system? Assume an interest rate of 7% per year. Enter your answer rounded to the nearest whole dollar and include a negative sign if necessary

b. The slow IT system will improve cashflows by $293,000 at the end of every year over three years and costs $698,000 today. What is the NPV of the slow system? Assume an interest rate of 7% per year. Enter your answer rounded to the nearest whole dollar and include a negative sign if necessary

c. Which IT system should the financial manager choose for the upgrade?

- The slow IT system.

- It does not matter.

- The fast IT system.

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