James Secretarial services is considering the purchase of one of two new personal computers, P and Q. The company expects both to provide benefits over a 10 year period and each has a required investment of $ 30,000. The firm uses a 10% cost of capital. Management has constructed the following table of estimates of annual cash inflows for pessimistic, most likely and optimistic results.

	Computer P	Computer Q
Initial investment	3,000	3,000
Outcome	Annual cash inflow
Pessimistic	$ 500	$ 400
Most likely	750	750
Optimistic	1,000	1,200

Determine the range of annual cash inflow for each of the two computers.

Construct a table similar to this for the NPVs associated with each outcome for both computers.

Find the range of NPVs and subjectively compare the risks associated with purchasing these