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LUN TUO Save Score: 6 of 9 pts 2 of 4 (3 complete) HW Score: 41.54%, 27 of 65 pts Exercise 20-17 (similar to) :3
LUN TUO Save Score: 6 of 9 pts 2 of 4 (3 complete) HW Score: 41.54%, 27 of 65 pts Exercise 20-17 (similar to) :3 Question Help Lethbridge Company runs hardware stores in Alberta. Lethbridge's management estimates that if it invests $150,000 in a new computer system, it can save $30,000 in annual cash operating costs. The system has an expected useful life of nine 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. B. (Click the icon to view the present value annuity factor table.) Required Requirement 1. a. Calculate the NPV (net present value) of the new computer system. (Use a minus sign or parentheses for a negative net present value.) Annuity PV factor Net Cash Total Present at i=12%, n=9 Inflow Value Net present value Present value of annuity of equal Enter any number in the edit fields and then click Check Ans Check Answer Clear All 4 A parts remaining Leave Ox ENG 2014 DLL * 2 of 4 (3 complete) milar to) Required e PU . 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 net initial investment (assume straight-line depreciation) 2. What other factors should Lethbridge Company consider in deciding whether to purchase the new computer system? elds Print Done Done Clear All DLL
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