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Princeton Computer Company is considering purchasing two different types of servers. Server A will generate net cash inflows of $26,000 per year and have a
Princeton Computer Company is considering purchasing two different types of servers. Server A will generate net cash inflows of $26,000 per year and have a zero residual value. Server A's estimated useful life is three years, and it costs $42,000. Server B will generate net cash inflows of $27,000 in year 1,$14,000 in year 2 , and $1,000 in year 3 . Server B has a $4,000 residual value and an estimated useful life of three years. Server B also costs $42,000. Princeton Computer Company's required rate of return is 12% 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. Begin with the payback period for Server A. (Round your answer to one decimal place, X.X.) Now determine the payback period for Server B. (Round your answer to one decimal place, X.X.) The payback period for Server B is years
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