8. KLM Flights are currrently in a financial crisis, and are looking at methods to decrease costs to stay afloat. The company is considering the purchase of a new computerised system that is expected to save the company $63,000 at the end of each year in reduced wages.

The system costs $230,000, plus another $10,000 to be installed. It is expected to last for five years after which it can be sold for $55,000. Operating expenses (such as electricity and maintenance) are $7,000 pa.

a)Determine the annual net cash flows of this investment (ignore the effect of taxes). Enter the information in the following table. Indicate whether cash flows are + or -:

Time	0	1	2	3	4	5
Net Cash Flow

b)Calculate the NPV if the required rate of return is 10% pa.

NPV_10% = $

c)Calculate the NPV if the required rate of return is 12% pa.

NPV_12% = $

- 9. A particular business venture has a net present value of +$150. Which of the following statements is false?

	A The venture inflows are greater than the venture outflows
	B The venture should be accepted
	C The venture makes a profit of $150
	D The return on the venture is more than the required rate of return