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Author Question: Network Service Center is considering purchasing a new computer network for $82,000. It will require ... (Read 86 times)

fbq8i

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Network Service Center is considering purchasing a new computer network for $82,000. It will require additional working capital of $13,000. Its anticipated eight-year life will generate additional client revenue of $33,000 annually with operating costs, excluding depreciation, of $15,000. At the end of eight years, it will have a salvage value of $9,500 and return $5,000 in working capital. Taxes are not considered. 

Required: 
a.  If the company has a required rate of return of 14%, what is the net present value of the proposed investment? 

b.  What is the internal rate of return?


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Marked as best answer by fbq8i on Mar 6, 2021

hramirez205

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fbq8i

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Reply 2 on: Mar 6, 2021
Excellent


Joy Chen

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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