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The management of Kimco is evaluating replacing their large mainframe computer with a modern network system that requires much less office space. The network would
The management of Kimco is evaluating replacing their large mainframe computer with a modern network system that requires much less office space. The network would cost $including installation costs and due to efficiency gains, would generate $ per year in operating cash flows accounting for taxes and depreciation over the next five years. The old mainframe has a remaining book value of $ and would be immediately donated to a charity for the tax benefit. Kimcos cost of capital is and the tax rate is
What is the NPV for this project?
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