You are the CTO of a company and you are planning to migrate your company’s legacy IT infrastructure to a cloud based “Software-as-a-Service” platform. The migration is expected to generate a cost saving of £10 million at the end of each year for the next 5 years. The initial cost of the project is £20 million. A nominal discount rate of 8.50% is appropriate for this kind of project. The expected inflation is 4.25%. 

What is the NPV of the project?

Answer rating: 100% (QA)

To calculate the Net Present Value NPV of the project we need to discount the future cash flows incl... View the full answer