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(6) (10 POINTS) Orange Computers is considering whether to invest in the development of a new software program. There is an initial expenditure of $5

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(6) (10 POINTS) Orange Computers is considering whether to invest in the development of a new software program. There is an initial expenditure of $5 million now, and another $5 million one year from now, which will result in annual profits of $4 million for three years starting two years from now. The market interest rate is 4 percent. Should Orange invest in the new software program? Why or why not? Explain your answer and show all your work-otherwise you will not receive full credit. You may use a calculator to answer this question-but NOT Microsoft Excel or any 00 300-GEON S other spreadsheet program. (Hint: Find the NPV.) (6) (10 POINTS) Orange Computers is considering whether to invest in the development of a new software program. There is an initial expenditure of $5 million now, and another $5 million one year from now, which will result in annual profits of $4 million for three years starting two years from now. The market interest rate is 4 percent. Should Orange invest in the new software program? Why or why not? Explain your answer and show all your work-otherwise you will not receive full credit. You may use a calculator to answer this question-but NOT Microsoft Excel or any 00 300-GEON S other spreadsheet program. (Hint: Find the NPV.)

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