THIS SHEET NOT DONE YET When you are finished with this exercise, change the status to "DONE! ALT-NPV Merlot City is planning to purchase a large computer. The computer system requires a payment now for hardware in the amount of $80,000 and software in the amount of $30,000. The new computer would result in savings of $24,000 per year. A system upgrade would be necessary in year 3 in the amount of $19,000. At the end of its 5-year life, the computer could be sold for salvage value of $9,000. Additionally, spare computer time could be sold for $11,000 in years 1-5. Compute the NPV using a cost of capital of 8.00%. Use positive numbers for cash inflows, use negative numbers for cash outflows. Years 0 1 2 3 4 5 Purchase of Computer Hardware Purchase of Computer Software Total Project Cost in Time Period 0 Savings System Upgrade Revenue from Time Sharing Salvage Value Net Annual Cash Flows Discount Factors at 8% Discounted Cash Flows Net Present Value PV OF $1.00 5% 1 2 1% 2% 3% 4% 6% 7% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 3 4 5 PV OF AN ANNUITY OF $1.00 6% 1 2 1% 2% 3% 4% 5% 7% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.8080 2.9410 2.8839 2.8286 2.7751 2.7232 2.6730 2.6243 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 3.3872 4.8534 4.7135 4.5797 4.4518 4.3295 4.2124 4.1002 3 4 5 9% 15% 0.8696 0.7561 8% 10% 11% 12% 13% 14% 0.9259 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8573 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7938 0.7722 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.5718 0.4972 8% 9% 10% 11% 12% 13% 14% 15% 0.9259 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696 1.7833 1.7591 1.7355 1.7125 1.6901 1.6681 1.6467 1.6257 2.5771 2.5313 2.4869 2.4437 2.4018 2.3612 2.3216 2.2832 3.3121 3.2397 3.1699 3.1024 3.0373 2.9745 2.9137 2.8550 3.9927 3.8897 3.7908 3.6959 3.6048 3.5172 3.4331 3.3522