50.1K

Verified Solution

Link Copied!

A new computer system will require an initial outiay of $22,000, but it will increase the firm's cash flows by $4,700 a year for each of the next 7 years: a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 10%. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. b. Calculate the NPV and decide if the system is worth installing if the requited rate of return is 15% : Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Consider this project with an internal rate of return of 19.7%. The following are the cash flows of the project. a. What is project NPV if the discount rate is 15% ? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. b. Should you accept the project? Yes No A new computer system will require an initial outlay of $22,000, but it will increase the firm's cash flows by $4,700 a year for each of the next 7 years a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 105 Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. b. Calculate the NPV and decide if the system is worth installing if the requited rate of return is 15% Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places

Answer & Explanation Solved by verified expert

See Answer