The School's IT director has requested bids for 200 desktop computers for the computer labs. He...

Transcribed Image Text:

The School's IT director has requested bids for 200 desktop computers for the computer labs. He has asked for separate bids for price and warranty cost per year for 3 years, which will be paid at the end of each year. He has received 2 bids. The data is displayed in the table below. The salvage values at the end of 3rd year are estimated by the IT director. The discount rate is 10% per year. a. Determine the NPV of each bid using Excel. < b. Copy the Excel cells and embed it in this Word file.*← < c. Which bid is better? Bid 1 Bid 2 Unit price (will be incurred now)< $1,200 $1,100 Fixed transportation cost $500 $800 Unit warranty cost (will be incurred at the end of each year, years 1 to 3)↔ Unit salvage value (will be received at the end of year 3)< $120 $150 $50 $30 *Hint: Copy the relevant cells from the Excel workbook< In the Word file click Past Special.< Click Microsoft Excel Worksheet Object Click OK. < To open the embedded Excel in Word, double (left) click on it.< The School's IT director has requested bids for 200 desktop computers for the computer labs. He has asked for separate bids for price and warranty cost per year for 3 years, which will be paid at the end of each year. He has received 2 bids. The data is displayed in the table below. The salvage values at the end of 3rd year are estimated by the IT director. The discount rate is 10% per year. a. Determine the NPV of each bid using Excel. < b. Copy the Excel cells and embed it in this Word file.*← < c. Which bid is better? Bid 1 Bid 2 Unit price (will be incurred now)< $1,200 $1,100 Fixed transportation cost $500 $800 Unit warranty cost (will be incurred at the end of each year, years 1 to 3)↔ Unit salvage value (will be received at the end of year 3)< $120 $150 $50 $30 *Hint: Copy the relevant cells from the Excel workbook< In the Word file click Past Special.< Click Microsoft Excel Worksheet Object Click OK. < To open the embedded Excel in Word, double (left) click on it.<

Answer rating: 100% (QA)

To calculate the NPV for each bid you can use the following steps Step 1 Calculate the present value ... View the full answer