Question
A firm is considering upgrading its technology at a cost of $300,000. The upgrade is expected to produce the following savings: Year Savings 0 -$300,000
A firm is considering upgrading its technology at a cost of $300,000. The upgrade is expected to produce the following savings:
Year | Savings |
0 | -$300,000 |
1 | $50,000 |
2 | $75,000 |
3 | $100,000 |
4 | $125,000 |
5 | $150,000 |
Requirements: a) Calculate the NPV if the discount rate is 6%. b) Calculate the IRR. c) Determine the payback period. d) Should the firm proceed with the technology upgrade?
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College Algebra
Authors: Margaret L. Lial, John Hornsby, David I. Schneider, Callie Daniels
12th edition
134697022, 9780134313795 , 978-0134697024
