Question no 1:

Northern Specialties just purchased inventory-management computer soft ware at a cost of $1,645,276. Cost savings from the investment over the next six years will produce the following cash fl ow stream: $212,455, $292,333, $387,479, $516,345, $645,766, and $618,325. What is the payback period on this investment?

Question no 2:

Net present value: Champlain Corp. is investigating two computer systems. Th e Alpha 8300 costs $3,122,300 and will generate cost savings of $1,345,500 in each of the next five years. Th e Beta 2100 system costs $3,750,000 and will produce cost savings of $1,125,000 in the first three years and then $2 million for the next two years. If the company's discount rate for similar projects is 14 percent, what is the NPV for the two systems? Which one should be chosen based on the NPV?