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Tamera Sdn Bhd, a newly established retail company, is considering to invest in a business solution system. There are two alternative business solutions but the
Tamera Sdn Bhd, a newly established retail company, is considering to invest in a business solution system. There are two alternative business solutions but the company can only choose to invest in one application. The following table summarizes the cash inflow and outflow of both investments. a) Calculate the Sum of Cashflows for both alternatives (4 marks) b) Using a Payback period method, calculate the duration of payoff. Based on the answer, which alternative provides fastest return? (3 marks) c) Using a Net Present Value (NPV) method, calculate the NPV of both alternatives assuming current discount rate is at 10%. Based on the answer, which alternative delivers better return? (10 marks) d) Between Payback period and NPV, which method do you prefer? Justify your answer. (4 marks)
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