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Lethbridge Company runs hardwa Omekaxesdge's management estimates that if it invests $160,000 in a new computer system, it can save $60,000 in annual cash operating

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Lethbridge Company runs hardwa Omekaxesdge's management estimates that if it invests $160,000 in a new computer system, it can save $60,000 in annual cash operating costs. The system has an expected useful life of five years and no terminal disposal value. The required rate of return is 12%. Ignore income tax issues in your answers. Assume all cash flows occur at year-end except for initial investment amounts Required 1. Calculate the following for the new computer system: a. Net present value. b. Payback period c. Internal rate of return. d. Accrual accounting rate of return based on the net initial investment (assume straight- line depreciation) 2. What other factors should Lethbridge Company consider in deciding whether to purchase the new computer system? Slide # 0

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