Info from question 8 with the answer at the end. Please use for question 9. 8. Walker...

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Finance

Info from question 8 with the answer at the end. Please use forquestion 9.

8. Walker & Campsey wants to invest in a new computersystem, and management has narrowed the choice to Systems A and B.System A requires an up-front cost of $125,000, after which itgenerates positive after-tax cash flows of $80,000 at the end ofeach of the next 2 years. The system could be replaced every 2years, and the cash inflows and outflows would remain the same.System B also requires an up-front cost of $125,000, after which itwould generate positive after-tax cash flows of $60,000 at the endof each of the next 3 years. System B can be replaced every 3years, but each time the system is replaced, both the cash outflowsand cash inflows would increase by 5%. The company needs a computersystem for 6 years, after which the current owners plan to retireand liquidate the firm. The company's cost of capital is 12%. Whatis the NPV (on a 6-year extended basis) of the system that adds themost value? System B 32711.91

9. Using the information from problem 8 on Walker & Campsey,what is the equivalent annual annuity (EAA) for System B? Enteryour answer rounded to two decimal places. Do not enter $ or commain the answer box. For example, if your answer is $12,300.456 thenenter as 12300.46 in the answer box.

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Info from question 8 with the answer at the end. Please use forquestion 9.8. Walker & Campsey wants to invest in a new computersystem, and management has narrowed the choice to Systems A and B.System A requires an up-front cost of $125,000, after which itgenerates positive after-tax cash flows of $80,000 at the end ofeach of the next 2 years. The system could be replaced every 2years, and the cash inflows and outflows would remain the same.System B also requires an up-front cost of $125,000, after which itwould generate positive after-tax cash flows of $60,000 at the endof each of the next 3 years. System B can be replaced every 3years, but each time the system is replaced, both the cash outflowsand cash inflows would increase by 5%. The company needs a computersystem for 6 years, after which the current owners plan to retireand liquidate the firm. The company's cost of capital is 12%. Whatis the NPV (on a 6-year extended basis) of the system that adds themost value? System B 32711.919. Using the information from problem 8 on Walker & Campsey,what is the equivalent annual annuity (EAA) for System B? Enteryour answer rounded to two decimal places. Do not enter $ or commain the answer box. For example, if your answer is $12,300.456 thenenter as 12300.46 in the answer box.

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