A new computer system will require an initial outlay of $18,500, but it will increase the firms cash flows by $3,700 a year for each of the next 7 years.

a.

Calculate the NPV and find out if the system worth installing if the required rate of return is 10%? What if it is 15%? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Rate of Return	NPV	Worth Installing
10%		Yes No
15%		Yes No

b.	How high can the discount rate be before you would reject the project? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Maximum discount rate

%