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A new computer system will require an initial outlay of $23,500, but it will increase the firm's cash flows by $5,000 a year for each
A new computer system will require an initial outlay of $23,500, but it will increase the firm's cash flows by $5,000 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.) $ 842.09 Net present value Worth installing Yes 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 No 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 11.18%
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