Question
A new computer system will require an initial outlay of $19,000, but it will increase the firm's cash flows by $3,800 a year for each
A new computer system will require an initial outlay of $19,000, but it will increase the firm's cash flows by $3,800 a year for each of the next 8 years.
a.Calculate the NPV and decide if the system is worth installing if the required rate of return is9%.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)
b.Calculate the NPV and decide if the system is worth installing if the required rate of return is14%.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)
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