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BIM Software Company considers purchasing a computer system in 2 0 2 4 . The initial capital cost of the computer system is $ 3

BIM Software Company considers purchasing a computer system in 2024. The initial capital cost of the computer system is $3.6M. The system will be implemented in 2025, the license is valid until 2029 and it will be sold for $23.000 at the end of 2029. It is estimated that a total of 4 officers' salary can be saved on the 1st year of implementation. There is also an anticipated saving of $2.5M per year from 2026 due to enhanced operations.
The yearly staff cost of an officer is $330K and the system maintenance cost is fixed at $400K per year.
(a) Prepare a table as below for the cash flow of the purchase.
(8%)
(b) Calculate the NPV of the purchase based on the cost of capital at 6%.(8%)
(c) Is this a good investment? Explain.
(4%)
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