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A new computer system will require an initial outlay of $20,500, but it will increase the firm's cash flows by $4,400 a year for each
A new computer system will require an initial outlay of $20,500, but it will increase the firm's cash flows by $4,400 a year for each of the next 7 years. a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 10%. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Net present value Worth installing b. Calculate the NPV and decide if the system is worth installing if the required rate of return is 15%. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Net present value Worth installing c. How high can the discount rate be before you would reject the project? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Maximum discount rate
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