Question: LG ( 4 ) E 5 - 4 Your firm has the option of making an investment in new software that will cost (

(4)

5 - 4

Your firm has the option of making an investment in new software that will cost

\ (\

130, 000 \)

today but will save the company money over several years. You estimate that the software will provide the savings shown in the following table over its five

-

year life. Should the firm make this investment if it requires a minimum annual return of

\ (9 \ % \)

on all investments?

LG ( 4 ) E 5 - 4 Your firm has the option of

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