QUESTION 6 A new computer system is expected to cost $40 million and generate annual savings of $12 million over the next five years Should the bank invest in this project if the discount rate is 12 percent Yes, because the net present value of the project is $3,257,314 No, because the net present value of the project is $3,257,314 Yes, because the net present value of the project is $20 million No, because the net present value of the project is $20 million Yes, because the net present value of the project is $4,980,000

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Question: QUESTION 6 A new computer system is expected to cost $40 million and generate annual savings of $12 million over the next five years. Should

QUESTION 6

A new computer system is expected to cost $40 million and generate annual savings of $12 million over the next five years. Should the bank invest in this project if the discount rate is 12 percent?

		Yes, because the net present value of the project is $3,257,314.
		No, because the net present value of the project is -$3,257,314.
		Yes, because the net present value of the project is $20 million.
		No, because the net present value of the project is -$20 million.
		Yes, because the net present value of the project is $4,980,000.

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