Question
Your firm has the option of making an investment in new software that will cost $126,069 today, but will save the company money over several
Your firm has the option of making an investment in new software that will cost $126,069 today, but will save the company money over several years. You estimate that the software will provide the savings shown in the following table over its 5-year life, Should the firm make this investment if it requires a minimum annual return of 11% on all investments?
Year | Savings estimate |
1 | $36,000 |
2 | $50,400 |
3 | $46,800 |
4 | $25,200 |
5 | $14,400 |
The present value of the stream of savings estimates is___ (Round to the nearest dollar.)Should the firm make this investment if it requires a minimum annual return of 11% on all investments?(Select the best answer below.)
Yes or No
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