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Blossom Corp. management is investigating two computer systems. The Alpha 8300 costs $2,785,525 and will generate cost savings of $1,495,025 in each of the next
Blossom Corp. management is investigating two computer systems. The Alpha 8300 costs $2,785,525 and will generate cost savings of $1,495,025 in each of the next five years. The Beta 2100 system costs $3,841,500 and will produce cost savings of $1,120,750 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?
NPV of Alpha system
NPV of Beta system
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