Solve Problem 3.11 (p110) . Clearly indicate if the project is a Go or NOGO and why?

3.11 Net Present Value. Your vice president of Management Information Systems informs you that she has researched the possibility of automating your organizations order-entry system. She has projected that the new system will reduce labor costs by $35,000 each year over the next five years. The purchase price (including installation and testing) of the new system is $125,000. What is the net present value of this investment if the discount rate is 10% per year?

Q-2b. In Q-2a, recalculate the NPV if the inflations is 4%, and indicate Go or NOGO and why? Review textbooks solutions and the class discussion sample and use similar approach. Show the two NPV calculations in the second tab named 3.11, 2a first on top and 2b below.

TABLE 3.11 Discounted Cash Flows and NPV (II) TABLE 3.11 Discounted Cash Flows and NPV (II)