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ABC is considering the purchase of a new computer system for the marketing department. The system costs $75,000 and has an expected life of five
ABC is considering the purchase of a new computer system for the marketing department. The system costs $75,000 and has an expected life of five years. The manager estimates the following savings will result if the system is purchased: Year or Period Savings $20,000 25,000 30,000 15,000 12.000 2 4 If ABC uses a 10% discount rate for capital-budgeting decisions, the net present value of the computer system would be Required: If Trenton uses a 10% discount rate for capital-budgeting decisions. What is the payback period of the computer system? What is the net present value of the computer system? What is the internal rate of returm for the computer system
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