Please calculate the net present value (NPV) for project A and option B. Which project would you pursue and why?

Scenario: DBS is a consulting start-up that has been open for two years and wishes to internally expand to offer its loyal customers the best possible service. The executive board members cannot decide which venture is best for the company A) Initiate data computation to offer accurate statistics about the results achieved and impact created or B) Reassign exiting employees and expand its current services to target a new market.

Project A:

Data Computation

Initial Investment: $540,000

Projected Lifetime: 5 years

Annual Cost: $20,000

Project B:

Service Expansion

Initial Investment: $900,000

Projected Lifetime: 3 years

Annual Cost: $90,000