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Hazem capital budgeting analyst HADARA software , Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing the
Hazem capital budgeting analyst HADARA software , Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing the old software used on the existing computers will produce total benefits of $440000 (in today's dollars) over the next 5 years. The existing software would produce benefits of $310000 (also in today's dollars) over that same time period. An initial cash investment of $250000 would be required to install the new software. The manager estimates that the existing software can be sold for $70000. Show how HAZEM will apply marginal cost-benefit analysis techniques to determine the following: The marginal (added) benefits of the proposed new, software? new The margina (added) cost of the proposed new software The net benefit of the proposed new software The marginal (added) benefits of the proposed new software The marginal (added) cost of the proposed new software 2 The net benefit of the proposed new software
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