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ANSWER REQUIREMENT 1 AND 2

Pritchet Computer Company is considering purchasing two different types of servers. Server A will generate net cash inflows of $27,000 per year and have a zero residual value. Server A's estimated useful life is three years, and it costs $43,000. Server B will generate net cash inflows of $29,000 in year 1,$10,000 in year 2 , and $4,000 in year 3. Server B has a $5,000 residual value and an estimated useful life of three years. Server also costs $43,000. Pritchet Computer Company's required rate of return is 16%. Read the Requirement 1. Calculate payback, accounting rate of return, net present value, and internal rate of return for both server investments. Use Microsoft Excel to calculate NPV and IRR. Begin with the payback period for Server A. (Round your answer to one decimal place, X.X.) j Now determine the payback period for Server B. (Round your answer to one decimal place, X.X.) The payback period for Server B is years. Calculate the accounting rate of return (ARR) for both server investments. (Round all intermediary calculations to the nearest whole dollar. Round your answers to the nearest hundredth percent, X.XX\%.)

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