Question: A new computer system will require an initial outlay of $20,500, but it will increase the firms cash flows by $4,800 a year for each
A new computer system will require an initial outlay of $20,500, but it will increase the firms cash flows by $4,800 a year for each of the next 6 years. a) Calculate the NPV and decide if the system is worth installing if the required rate of return is 8%. b) Calculate the NPV and decide if the system is worth installing if the required rate of return is 13%. c) How high can the discount rate be before you would reject the project? Can someone answer these?
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