As the manager of the pension fund, you are frequently targeted by software companies peddling investment simulation software. You have finally narrowed down your choice to two applications. You need to analyze the options by calculatingNPV, IRR and Payback Periodbased on their purchase price and savings to your company over time. Your staff has prepared a cash-flow table to help you. Year zero shows the purchase price of each application, and the figures listed for years 1-3 represent the savings to the company in successive years.

As the manager of the pension fund, you are frequently targeted by software companies peddling investment simulation software. You have finally narrowed down your choice to two applications. You need to analyze the options by calculating NPV, IRR and Payback Period based on their purchase price and savings to your company over time. Your staff has prepared a cashflow table to help you. Year zero shows the purchase price of each application, and the figures listed for years 1 3 represent the savings to the company in successive years. Year Application I Application II 0 (today) -$1.5 million -$1 million 1 $0.8 million $0.5 million 2 $0.7 million $0.24 million 3 $0.3 million $0.6 million You are considering three possible scenarios. Question 7: If the payback period is two years, which application should be selected? Question 8: If the required rate of return is 15 percent, which application should be selected? Question 9: If the selection criterion is IRR, which application should be selected? *Respond to the questions 7, 8, and 9 above by submitting a single, integrated report that shows your supporting data and calculations. Finally, provide a recommendation and rationale for purchasing either Application I or Application II. *Be sure to show your calculations in Excel