Question: Ivanhoe Corp. management is investigating two computer systems. The Alpha 8300 costs $2,408,425 and will generate cost savings of $1,583,825 in each of the
Ivanhoe Corp. management is investigating two computer systems. The Alpha 8300 costs $2,408,425 and will generate cost savings of $1,583,825 in each of the next five years. The Beta 2100 system costs $3,249,500 and will produce cost savings of $1,200,750 each year in the first three years 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? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to O decimal places, e.g. 1,525.) NPV of Alpha system $ NPV of Beta system S Which one should be chosen based on the NPV? Ivanhoe should choose the system.
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