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1. Obsolete Technology is considering purchase of a new computer system to help handle its warehouse inventories. The system costs $50,000, is expected to last
1. Obsolete Technology is considering purchase of a new computer system to help handle its warehouse inventories. The system costs $50,000, is expected to last 4 years, and should reduce the cost of managing inventories by $22,000 a year. The opportunity cost of capital is 10%. Should Obsolete go ahead? 2. From the table below Year 0 1 Project B -100 50 Project A -100 40 40 40 40 2 3 1 50 50 4 a) If the opportunity cost of capital is 11% which of these projects is worth pursuing? b) Which project would you choose if the opportunity cost of capital is 16%
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