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The mayor of Statesville is considering the purchase of a new computer system for the city's tax department. The system costs $75,000 and has an
The mayor of Statesville is considering the purchase of a new computer system for the city's tax department. The system costs $75,000 and has an expected life of five years. The mayor estimates the following savings will result if the system is purchased: Year 1 2 3 4 5 Savings $20,000 25,000 30,000 15,000 12,000 If Statesville uses a 10% discount rate for capital-budgeting decisions, the net present value of the computer system would be: Select one: O a. $489. O b. $4,057 O c. $11,658. O d. $63,342 e. $79,057
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