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Piedmont Computer Company is considering purchasing two different types of servers. Server A will generate net cash inflows of $25,000 per year and have a
Piedmont Computer Company is considering purchasing two different types of servers. Server A will generate net cash inflows of $25,000 per year and have a zero residual value. Server A's estimated useful life is three years, and it costs $45,000 Server B will generate net cash inflows of $25,000 in year 1, $15,000 in year 2, and $5,000 in year 3. Server B has a $5,000 residual value and an estimated useful life of three years. Server B also costs $45,000. Piedmont Computer Company's required rate of return is 14%. Read the requirements. Requirement 1. 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. * Requirements Begin with the payback period for Server A. (Round your answer to one decimal place, X.X.) = Server A = Payback years 1. 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 2. Assuming capital rationing applies, which server should Piedmont Computer Company invest in? Print Print Done Done Choose from any list or enter any number in the input fields and then click Check Answer. 7 parts I remaining Clear All Check
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