A new computer system will require an initial outlay of $20,250, but it will increase the firms cash flows by $4,500 a year for each of the next 6 years.

Calculate the NPV and decide if the system is worth installing if the required rate of return is 8%. Net present Value ? Worth Installing ?

Calculate the NPV and decide if the system is worth installing if the required rate of return is 13%. Net present value? Worth installing?