a$)$ The new IT system will also have the advantage of allowing for a greater volume of work and hence expansion of the business. Carry out an initial investment appraisal for the project that examines the situation over $5$ years. The following information should be taken into consideration. $$ Salaries start at $22000$ in the $1$st year and are expected to increase at $4\%$ per annum $$ General running costs for the additional research$/$testing services will be $15000$ per year in the $1$st year with expected inflationary costs of $3\%$ for each subsequent year. $$ Initial accreditation costs will happen in year $1.$ Regarding subsequent costs, $1600$ has be nominated to cover re$-$accreditation costs after $3$ years. $$ Income from the new services is projected to amount to: Year $132000$ Year $239000$ Year $3-55000$ Year $4-60000$ Year $5-65000$ In terms of best option, the company has narrowed the choice down to two systems from different software providers. $$ I.$$ The DataSecure System that costs $20,000.$ Maintenance and support costs are included for the $1$st year but will be $750$ for each subsequent year. $$ II$.$ The Result Sure $400$ that has an initial outlay of $15,000$ and then $3000$ additional payment for each of the first $3$ years. Maintenance$/$support is only charged at $500$ per annum after the payment is complete. Compare the investment position for the two systems using NPV and IRR. Assume the cost of capital is $9\%.[15$ marks$]$