Question: Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $3,006,625 and will generate cost savings of $1,548,725 in each of the next

Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $3,006,625 and will generate cost savings of $1,548,725 in each of the next five years. The Beta 2100 system costs $4,627,500 and will produce cost savings of $1,177,750 in the first three years and then $2 million for the next two years. If the companys discount rate for similar projects is 14 percent: What is the NPV for the two systems? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round answers to 0 decimal places, e.g. 5,275.)

NPV of Alpha system $ =

NPV of Beta system $ =

Which one should be chosen based on the NPV?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Problem 9.11 Management of Franklin Mints, a confectioner, is considering purchasing a new jelly bean-making machine at a cost of $282,730. They project that the cash flows from this investment will...

Problem 9.14 Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $3,243,425 and will generate cost savings of $1,302,825 in each of the next five years. The Beta...

Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $3,240,625 and will generate cost savings of $1,051,425 in each of the next five years. The Beta 2100 system...

Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $2,761,825 and will generate cost savings of $1,186,025 in each of the next five years. The Beta 2100 system...

Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $2,878,925 and will generate cost savings of $1,448,625 in each of the next five years. The Beta 2100 system...

Problem 10.14 Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $2,761,825 and will generate cost savings of $1,186,025 in each of the next five years. The Beta...

Net present value: Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $3,122,300 and will generate cost savings of $1,345,500 in each of the next five years. The...

Problem 9.14 Champlain Corp management is investigating two computer systems. The Alpha 8300 costs $2,991,425 and will generate cost savings of $1,560,125 in each of the next five years. The Beto...

Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $3,122,300 and will generate cost savings of $1,345,500 in each of the next five years. The Beta 2100 system...

Champlain Corp. management is investigating two computer systems. The Alpha 8300 costs $2,677,625 and will generate cost savings of $1,175,125 in each of the next five years. The Beta 2100 system...

A certain amount of mercury is compressed from an initial pressure of 500 MPa to a certain amount of final pressure. The final pressure of mercury required, to reduce a unit volume of mercury by 10%...

You own a call option that expires soon. You believe the stock price will decrease between now and the maturity. There is no dividend. Should you exercise the option now, before the price decline?

Cot purchases 50 shares of Peapod Company common stock on February 19, 2017, at a cost of $4,300. He sells the 50 shares on July 2, 2020, for $9,000. On March 14, 2020, Cot purchases 100 shares of...

give a brief summary of the different strategies related to planning and managerial levels, given in hellriegel 2 0 2 2 and the importance of theses strategies in any business organization

=+Identify the key categories of metrics (basic, advanced, channel, and behavioral)

=+What is the payment model? Are the tools free? Does the platform have a monthly fee? What different plans does it offer?

=+based on location, platform, and key word analysis. Depending on what you are willing to invest in and use, it is important to note where each tool lands in your social media budget and overview.