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Piedmont Computer Company is considering purchasing two different types of servers. Server A will generate net cash inflows of $ 2 5 , 0 0
Piedmont Computer Company is considering purchasing two different types of servers. Server A will generate net cash inflows of $ per year and have a zero residual value. Server As
estimated useful life is three years, and it costs $
Server B will generate net cash inflows of $ in year $ in year and $ in year Server B has a $ residual value and an estimated useful life of three years. Server B
also costs $ Piedmont Computer Company's required rate of return is
Read the requirements.
Requirement Calculate payback, accounting rate of return, net present value, and internal rate of return for both server investments. Use Microsoft Excel to calculate NPV and IRR.
Begin with the payback period for Server ARound your answer to one decimal place, XX
Now determine the payback period for Server BRound your answer to one decimal place, XX
The payback period for Server B is
years.
Calculate the accounting rate of return ARR for both server investments. Round all intermediary calculations to the nearest whole dollar. Round your answers to the nearest hundredth percent,
XXX
Calculate the net present value NPV for both server investments. Use Microsoft Excel to calculate NPVRound the NPV calculations to the nearest whole dollar. Use parentheses or a minus
sign for a negative net present value.
NPV
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