Question
Blossom Corp. management is investigating two computer systems. The Alpha 8300 costs $ 2,807,325 and will generate cost savings of $ 1,418,025 in each of
Blossom Corp. management is investigating two computer systems. The Alpha 8300 costs $ 2,807,325 and will generate cost savings of $ 1,418,025 in each of the next five years. The Beta 2100 system costs $ 2,841,500 and will produce cost savings of $ 1,034,750 in the first three years and then $2 million for the next two years. The companys discount rate for similar projects is 14 percent. What is the NPV of each system? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) NPV of Alpha system $ enter a dollar amount rounded to 0 decimal places NPV of Beta system $ enter a dollar amount rounded to 0 decimal places Which one should be chosen based on the NPV?
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