Calculate the npv of each choice suggest when should bell

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Bell Mountain Vineyards is considering updating its current manual accounting system with a high-end electronic system. While the new accounting system would save the company money, the cost of the system continues to decline. The Bell Mountain s opportunity cost of capital is 15.7 percent, and the costs and values of investments made at different times in the future are as follows:

Year

Cost

Value of Future Savings

(at time of purchase)

0

$5,000

$7,000


1

4,150

7,000


2

3,300

7,000


3

2,450

7,000


4

1,600

7,000


5

750

7,000


Calculate the NPV of each choice.

Suggest when should Bell Mountain buy the new accounting system?

Bell Mountain should purchase the system inyear 4year 5year 1year 2year 3

Reference no: EM13480102

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