Your firm has the option of making an investment in new software that will cost $130,000 today
Question:
Your firm has the option of making an investment in new software that will cost $130,000 today and is estimated to provide the savings shown in the following table over its 5year life:
Year Savings estimate
1 ...........$35,000
2 ........... 50,000
3 ........... 45,000
4 ........... 25,000
5 ........... 15,000
Should the firm make this investment if it requires a minimum annual return of 9% on all investments?
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Related Book For
Principles Of Managerial Finance
ISBN: 9780136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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