Current Attempt in Progress The consulting company Walker Lee & Lewis (WLL) is in that never-ending budgeting phase of the year. Realizing that they couldn't defer a technology update any longer, the managers plan to replace all of the computers in the office. The old computers will be sold for market value. When the new computers reach the end of their useful lives, they will be sold as well. The cost of the combined new computers and annual software updates should be more than covered by efficiency gains and increased volume of sales-at least that's what the managers are expecting. Information related to this investment is as follows Cost of new computers Salvage value of new computers at end of useful life Life of new computers (years) $25,500 $2,500 5 Market value of old computers today (equal to book value) $2,000 Annual software update cost (necessary for all computers, old or new) $2,700 Annual operating cash inflows from efficiency gains and increased sales due to new computers $9,600 Minimum required rate of return 6% 20% Applicable tax rate Determine if this investment makes sound financial sense for this company by completing the following Click here to view the factor table Calculate the NPV of this investment. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answer to 2 decimal places eg. 5,125.36. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) NPV $ Based on this NPV amount, is the IRR higher or lower than 6% ? The IRR Save for Later than 6% (b) Calculate the IRR for this investment. (Round answer to 2 decimal places, eg. 15.25%) IRR Save for Later % Attempts: 0 of 2 used Submit Answer (c) Determine the simple payback period using (1) before-tax cash flows and (2) after-tax cash flows. (Round answers to 2 decimal places, eg. 15.25) Before-Tax Cash Flows After-Tax Cash Flows Simple payback period (d) Save for Later Attempts: 0 of 2 used Submit Answer Determine the discounted payback period using after-tax cash flows. (Round present value factor calculations to 5 decimal places, eg 125124 and final answer to 2 decimal places eg. 5.125.36) Discounted payback period D Find the ARR. (Round answer to 1 decimal place, eg. 15.2%) ARR Save for Later Attempts: 0 of 2 used Submit Answer (0 Calculate the profitability index for this investment. (Round answer to 2 decimal places, eg. 15.25.) Profitability index Save for Lave Attempts: 0 of 2 used Submit