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(1). Assume the annual interest/discount rate is 3%. Calculate the present value of a future dollar and fill in the table below ( Note: Use
(1). Assume the annual interest/discount rate is 3%. Calculate the present value of a future dollar and fill in the table below (Note: Use two decimals numbers and don't round the values.).
(2). An information system project takes $12K to develop and requires $2K to maintain its normal operation each year. The system generates $5K benefit each year since its operation. What is the projects net present value in 3 years?
(3). Based on your calculation, should the project proceed?
(1) Answer
Year | discount rate = 3% |
0 | 1.00 |
1 | |
2 | |
3 |
(2) Answer
year 0 | year1 | year2 | year3 | |
benefits | ||||
Benefits at Present Value | ||||
Accumulated Benefits at Present Value | ||||
costs | ||||
Costs at Present Value | ||||
Accumulated Costs at Present Value | ||||
Net Present Value |
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