Question: Cullumber corp. management is investingating two computer systems. The Alpha 8 3 0 0 costs $ 2 , 6 7 7 , 6 2 5

Cullumber corp. management is investingating 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 systems costs $3,058,500 and will produce cost savings of $857,750 each year in the first three yeats and then $2 million each year for the next two years. The company's discount rate for similar projects is 14 percent.
What is the NPV of each system?
NPV of Alpha System =?
NPV of Beta System =?
(enter the negative amounts using the 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.)

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!