Question: Determine the Net Present Value (NPV) for the following: An information system will cost $75,000 (Year 0) to implement over one year and will

Determine the Net Present Value (NPV) for the following: An information system

Determine the Net Present Value (NPV) for the following: An information system will cost $75,000 (Year 0) to implement over one year and will produce no savings (Year O) during that year. When the system goes online, the company will save $23,000 during the first year (Year 1) of operation. For the next five years, the savings will be $32,000 per year. The system will have a $2000 maintenance cost each year from Year 1 to Year 6. Assuming a 12 percent discount rate, what is the NPV of the system? Use the following present value factor to calculate the NPV of the system (You can use a calculato for the calculation). Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Factor 1.000 0.893 0.797 0.712 0.636 0.567 0.507 (12%)

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