2. You oversee concessions sales at a Major League ballpark and are in need of a new customer relationship management software program. You are considering two different software programs but are only in need of one and anticipate the cost of capital to be 8%.

The first software program will cost $45,000. You project that this system will increase your after-tax revenue over time in the following way: $15,000 in Year 1; $18,000 in Year 2; $23,000 in Year 3; and $32,000 in Year 4.

The second software program will cost $50,000. You project that this system will increase your after-tax revenue over time in the following way: $13,000 in Year 1; $15,000 in Year 2; $20,000 in Year 3; $22,000 in Year 4; $25,000 in Year 5; and $26,000 in Year 6.

Address each of the prompts below.

a. Calculate the net present value (NPV) of the first software program. Show your work.

b. Calculate the net present value (NPV) of the second software program. Show your work.

c. Which software program should the ballpark purchase?

d. Why should that program be purchased?