Question: Problem 8-12 NPV/IRR (LO1) A new computer system will require an initial outlay of $14,150, but it will increase the firms cash flows by $3,100

Problem 8-12 NPV/IRR (LO1)

A new computer system will require an initial outlay of $14,150, but it will increase the firms cash flows by $3,100 a year for each of the next 7 years.

a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 10%. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)


Net present value
Worth installing

b. Calculate the NPV and decide if the system is worth installing if the required rate of return is 15%. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)


Net present value
Worth installing

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