Problem 1:

Three software development projects have the following cashflows.

Project Jacquard has an initial investment of $1,500,000, annual savings of $425,000 from years 1 through 4, and $530,000 in year 5.

Project Quantumhas an initial investment of $2,000,000, annual savings of $925,000 from years 1 through 4, and $200,000 in year 5.

Project ConvNext has an initial investment of $1,000,000, annual savings of $180,000 in year 1, and $400,000 from years 2 through 5.

The company would like to earn a 25% rate of return on these projects. Use the Net Present Value method to select the best project the company should invest in.