Question: Why isn't part b NPV -53.16? Thanks! A new computer system will require an initial outlay of $20,000, but it will increase the firm's cash
A new computer system will require an initial outlay of $20,000, but it will increase the firm's cash flows by $4,300 a year for each of the next 8 years. Q. Calculate the NPV and decide if the system is worth installing if the required rate of return is 9%. Note: Negotive amount should be indicoted by a minus sign. Do not round intermediate colculations. Round your onswers to 2 decimol ploces. b. Calculate the NPV and decide if the system is worth instaling if the tequired rate of return is 14%. Note: Negotive amount should be indicoted by o minus sign, Do not round intermediote colculations. Round your answers to 2 decimal ploces. Answer is complete but not entirely correct. c. How high con the discourt rate be before you would iefect the project? Note: Do not round intermediste colculations. Enter your answer os a percent rounded to 2 decimal ploces
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
