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Problem (50 points) The following are estimates of the costs and benefits associated with computer system project 2 years 8 years $150,000 $ 20,000 Completion

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Problem (50 points) The following are estimates of the costs and benefits associated with computer system project 2 years 8 years $150,000 $ 20,000 Completion Time: Expected Useful Life: One Time Costs: Annual Recurring Costs: (incurred from the beginning of Year 2) Annual Tangible Benefit (earned from the end of Year 2) Interest Rate: 14 % $100,000 Present value of $1 factor for l periods at 14% 0.877 Present value of $1 factor for 2 periods at 14%-0.769 Present value of annuity factor for 8 periods at 14% = 4.639 Present value of annuity factor for 9 periods at 14%-4.946 Use the following timetable: 10 0 ($20,000) ($20,000) ($20,000) ($20,000) ($150,000) $100,000 .$100,000 $100,000 $100,000 Required: Compute the net present value. (You must show the computation.)

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