3.BlossomCorp. management is investigating two computer systems. The Alpha 8300 costs $3,006,625and will generate cost savings of $1,548,725in each of the next five years. The Beta 2100 system costs $4,627,500and will produce cost savings of $1,177,750in the first three years and then $2 million for the next two years. The company's discount rate for similar projects is 14 percent.

a. What is the NPV of each system?(Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.)

NPV of Alpha system $____

NPV of Beta system $____

b.Which one should be chosen based on the NPV?

4.Carla Vista, Inc., a resort management company, is refurbishing one of its hotels at a cost of $8,226,621. Management expects that this will lead to additional cash flows of $1,890,000for the next six years.

a.What is the IRR of this project? (Round answer to 2 decimal places, e.g. 5.25%.)

b.If the appropriate cost of capital is 12 percent, shouldCarla Vistaaccept or reject this project?

5.Carla VistaCorp. management is planning to spend $650,000 on a new marketing campaign. They believe that this action will result in additional cash flows of $314,000each year for three years. If the discount rate is 17.5 percent, what is the NPV on this project?(Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.)