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What is the net present value of investment

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Your vice president informs you that she has researched the possibility of automating your organization's order-entry system. She has projected that the new system will reduce labor costs by $25,000 each year over the next five years. The purchase price (including installation and testing) of the new system is $100,000. The system is expected to have a useful life of five years, after which time it can be sold in the secondary computer systems market for $15,000. What is the net present value of this investment if the discount rate is 8.5% per year?

Reference no: EM132245064

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