ZEN Services Center is located in Hanoi, and it is considering a new software system for...

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ZEN Services Center is located in Hanoi, and it is considering a new software system for $82,000. It will require additional working capital of $13,000. Its anticipated eight-year life will generate additional client revenue of $33,000 annually with operating costs, excluding depreciation, of $15,000. At the end of eight years, it will have a salvage value of $9,500 and retur $5,000 in working capital. Taxes are not considered. Required: (a). If the company has a required rate of return of 14%, what is the net present value of the proposed investment? marks) (b). What is the internal rate of return? (1 ZEN Services Center is located in Hanoi, and it is considering a new software system for $82,000. It will require additional working capital of $13,000. Its anticipated eight-year life will generate additional client revenue of $33,000 annually with operating costs, excluding depreciation, of $15,000. At the end of eight years, it will have a salvage value of $9,500 and retur $5,000 in working capital. Taxes are not considered. Required: (a). If the company has a required rate of return of 14%, what is the net present value of the proposed investment? marks) (b). What is the internal rate of return? (1

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a To calculate the net present value NPV of the proposed investment we first need to find the presen... View the full answer