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unting (Fall 2020) sec. 01 Network Service Center is considering purchasing a new computer network for $82,000. It will require additional working capital of $13,000.
unting (Fall 2020) sec. 01 Network Service Center is considering purchasing a new computer network for $82,000. It will require additional working capital of $13,000. Its anticipated eight-year life will generate additional client revenue of $33,000 annually with operating costs, excluding depreciation, of $15,000. At the end of eight years, it will have a salvage value of $9,500 and return $5,000 in working capital. Taxes are not considered. Required: If the company has a required rate of return of 14%, what is the net present value of the proposed investment? a. b. What is the internal rate of return? Answer 7 A - B
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