System is worth installing if required rate of return

Assignment Help Financial Management

Reference no: EM131908306

A new computer system will require an initial outlay of $16,000, but it will increase the firm’s cash flows by $3,200 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.)

Reference no: EM131908306

Questions Cloud

What is the projected dividend amount per share : Earnings for next year are estimated at $70,000. What is the projected dividend amount per share

Discuss liability under the rules of simple negligence : Suppose that B's faulty driving causes an accident that injures driver A. A was not at fault in her driving, but she was not wearing her seat belt.

What is the equivalent annual cost : Assuming a 10% discount rate, what is the equivalent annual cost (EAC) of the Cadillac cleaner?

Prepare a cvp analysis listing the cost and sales projection : Prepare a CVP analysis listing the cost and sales projections for the proposal. The owner must propose to the school's administration a charge per child.

System is worth installing if required rate of return : Calculate the NPV and decide if the system is worth installing if the required rate of return is 9%

What is the yield of maturity : What is the yield of maturity if the bond has 10 years remaining to maturity and it is sold at 852.80?

How would you define the activity level of a railroad : For purposes of the theory of accidents, how would you define the activity level of a railroad? An airline? For some activities, the level relevant.

Compute depreciation expense using the sum-of-years-digits : Lockard Company purchased machinery on January 1, 2014, for $103,840. Compute 2014 depreciation expense using the sum-of-the-years'-digits method.

Is the behavior negligent under the hand rule : Suppose that the sunken barge in United States v. Carroll Towing Co. and its cargo are worth $100,000. Assume that the probability that the barge would break.

User Account

All Pages