An applicant tracking system in the Recruiting Department requires an immediate investment (Year O) of $519,000...

 

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An applicant tracking system in the Recruiting Department requires an immediate investment (Year O) of $519,000 and is expected to save money for the department through lower average cost per hire according to the schedule below. The firm's weighted average cost of capital is 9 percent (which may be used as the discount rate for average-risk investments as well as this applicant tracking system). Year 1 2 The Present Value of $1 Table (Table 3) tells us: Period (n) 1 2 3 4 Formulas: Cash Flows $37,375 $88,007 $59,750 $19,400 Present Value Factor at 9% Discount Rate .917 .842 .772 .708 Net present value= Present value of cash inflows - Present value of cash outflows Benefit cost ratio = Present value of cash inflows Present value of cash outflows A) What is the Net Present Value (NPV) and Benefit Cost Ratio (BCR) of investing in this applicant tracking system? B) Do these measures support the applicant tracking system investment decision? Why or why not? An applicant tracking system in the Recruiting Department requires an immediate investment (Year O) of $519,000 and is expected to save money for the department through lower average cost per hire according to the schedule below. The firm's weighted average cost of capital is 9 percent (which may be used as the discount rate for average-risk investments as well as this applicant tracking system). Year 1 2 The Present Value of $1 Table (Table 3) tells us: Period (n) 1 2 3 4 Formulas: Cash Flows $37,375 $88,007 $59,750 $19,400 Present Value Factor at 9% Discount Rate .917 .842 .772 .708 Net present value= Present value of cash inflows - Present value of cash outflows Benefit cost ratio = Present value of cash inflows Present value of cash outflows A) What is the Net Present Value (NPV) and Benefit Cost Ratio (BCR) of investing in this applicant tracking system? B) Do these measures support the applicant tracking system investment decision? Why or why not?

Answer rating: 100% (QA)

A To calculate the Net Present Value NPV and Benefit Cost Ratio BCR we first need to calculate the p... View the full answer