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A new computer system will require an initial outlay of $17,500, but it will increase...

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Finance

A new computer system will require an initial outlay of $17,500, but it will increase the firms cash flows by $3,500 a year for each of the next 8 years.

a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 9%. (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 required rate of return is 14%. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

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