Determine the NPV for the following investment on an information system: The system will cost $95,000 to implement over a one-year period and will produce no savings during that year. When the system goes online the following year, the company will save $30,000 during the first year of operation. For the next four years, the savings will be $25,000 per year. In addition to the initial one-time development cost, for each year of operation, the operating cost will be 10% of the saving of that year.

(1) Assuming a 5% discount rate, what is the NPV of the system?

(2) What if the discount rate is changed to 12%?

I set up the computation for you as shown in the table below for discount rate of 5%. Copy and paste the table in Excel and complete the NPV computation. You need to repeat the table to compute for 12% discount rate on the same sheet. Are these two cases economical viable?