You are a Financial Analyst for KYC Company. Management is considering five different projects to help increase employee productivity at workplace. Management wants you to evaluate below projects. Note: Given our class time constraints, this assignment has been simplified by removing depreciation, net operating capital, and tax rates. The only cash flow you would have in the terminal cash flow is if there is a salvage value, and we assume that the salvage value and the book value match so calculating tax benefit or liability is not necessary.

Purchase a database server 35 work groups. Cost and installation is $5,250 each. Cash flows are expected to be $98,200 for year 1 and increase by 2.5% for the next five years. The salvage value at the end of year 6 is $42,000.