Question
Porter Auto Parts Company decides to purchase a new computer system. Below is the cost information they get from one potential supplier. Porter Auto Parts
Porter Auto Parts Company decides to purchase a new computer system. Below is the cost information they get from one potential supplier. Porter Auto Parts has a cost of capital of 10%. Using total cost of ownership analysis, how much is the cost in Year 1 at present value (keep two decimal places)?
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Purchase Price | $405,000 | $0 | $0 | $0 | $0 |
| Installation | $50,000 | $0 | $0 | $0 | $0 |
| Transition Costs | $300,000 | $100,000 | $5,000 | $0 | $0 |
| Employee Training | $100,000 | $300,000 | $100,000 | $5,000 | $5,000 |
| Ongoing Support | $10,000 | $0 | $0 | $0 | $0 |
| Future Upgrades | $0 | $5,000 | $10,000 | $10,000 | $10,000 |
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Basic Business Statistics Concepts And Applications
Authors: Mark L. Berenson, David M. Levine, Timothy C. Krehbiel
12th Edition
9780132168380
