2 A project manager is managing a software development project for a hospital. There is a new computer available that will speed up the development process considerably. The new computer costs $50,000 including shipping, installation, and start-up. The computer will cause a gross savings of $100,000. What is the net present value of the savings if they occur one year after the expenditure for the computer? Assume a 10% interest rate.

# 3 A project manager is assigned to a project early in the project life cycle. One of the things that must be done is to do a justification for the project. Since very little information is known about the project, the estimates are considered to be rough estimates. The following table is the project managers estimate of the cash flows that will take place over the next five years.

What is the payback period for this project?

What is the net cash flow at the end of five years?