Roger and Serena, tennis consultants are spending all their time trying to fix their computer system, instead of hitting forehands with tennis clients. It is requiring service on a regular basis, and the consulting bills are adding up. They are frustrated with this, and have procured three bids for a new system. But as their skills relate more to forehands, they are confused about which to accept. They have hired the USFSP Cost 1 dass to analyze such. They think all the systems would have a useful life of 5 Proposal A $60.000 Proposal B $100,000 Proposal C $45.000 7,000 Initial investment in equipment Working capital needs, returned at end of project life Annual maintenance costs Salvage value at end of year 5 Consulting billing rate Additional consulting hours 20,000 1 5,000 10,000 0,000 $250 1001 1,000 11,000(a) 45,000 S250 1 50l (a) Annual maintenance costs for Proposal B escalate 20% per year due to complexity of system The computer system that is currently in use is costing Roger and Serena $25,000 per year in operating costs. It initially cost $75,000 when it was purchased 5 years ago. They have received an offer of $5,000 from a company which wants to purchase the system for parts. If Roger and Serena can purchase an efficient system, they can work additional hours for their clients (noted as additional consulting hours above). Roger and Serena bill at $500 per hour. Depreciation expense is calculated using straight line. 1. Compute the net present value and IRR of each proposal with a discount rate of 8%. 2. Compute the payback of each 3. Compute the accrual accounting rate of return (AAROR) on both a pretax and after-tax basis. As Roger and Serena are so successful on the tennis tour, their tax rate is 40% 4. Which project would you recommend and why? Include both quantitative and qualitative factors. This is your conclusion. The conclusion should be included on the "Input" tab