Alamo Foods of San Antonio wants to introduce a new computer system for its perishable products warehouse The costs and benefits are as follows a Given a discount rate of 8 percent ( 08), perform present value analysis on the data for Alamo Foods b What is your recommendation for Alamo Foods Year C...

a Present Value Years Costs Benefits Costs Benefits 1 33000 21000 30556 19444 2 34600 26200 ...

Alamo Foods of San Antonio wants to introduce a new computer system for its perishable products warehouse.

Question:

Alamo Foods of San Antonio wants to introduce a new computer system for its perishable products warehouse. The costs and benefits are as follows:

Year Costs Benefits $33,000 $21,000 34,600 26,200 36,300 32,700 38,100 40,800 40,000 51,000 6. 42,000 63,700

a. Given a discount rate of 8 percent (.08), perform present value analysis on the data for Alamo Foods

b. What is your recommendation for Alamo Foods?

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...