Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An applicant tracking system in the Recruiting Department requires an immediate investment (Year O) of $519,000 and is expected to save money for the department

image text in transcribed
image text in transcribed
An applicant tracking system in the Recruiting Department requires an immediate investment (Year O) of $519,000 and is expected to save money for the department through lower average cost per hire according to the schedule below. The firm's weighted average cost of capital is 9 percent (which may be used as the discount rate for average-risk investments as well as this applicant tracking system). Year Cash Flows $37,375 $88,007 $59.750 $19,400 The Present Value of $1 Table (Table 3) tells us: Period (n) Present Value Factor at 9% Discount Rate .917 .842 .772 .708 Formulas: Net present value = Present value of cash inflows - Present value of cash outflows Benefit cost ratio - Present value of cash inflows Present value of cash outflows A) What is the Net Present Value (NPV) and Benefit Cost Ratio (BCR) of investing in this applicant tracking system? A) What is the Net Present Value (NPV) and Benefit Cost Ratio (BCR) of investing in this applicant tracking system? B) Do these measures support the applicant tracking system investment decision? Why or why not

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Stocks Analysis A Fundamentalist Approach

Authors: Luciano Storelli ,Storelli And Pepe Stocks Investments

1st Edition

979-8395523006

More Books

Students also viewed these Finance questions