I am struggling to figure out what I need to do to move forward with this problem. I am taking an online class with little instruction, and to me it feels like im missing some variable, but honestly im just confused.
Your vice president of Management Information Systems 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 $35,000 each year over the next five years. The purchase price (including installation and testing) of the new system is $125,000. What is the net present value of this investment if the discount rate is 10% per year?
Hi,
I had a mock question saying this: if we have 2 projects A and B, A is better when it comes to NPV and B is better when we compare with IRR. which criteria should we use (prioritize):
a-NPV
b-IRR
c- pay-back period
d-cost of capital
I couldnt find anything on this on net, it would be a great help if u tell
ty
Im struggling on this net present value im getting a value close to the answer range but im not sure where I’m going wrong
Question:
A 2 year project needs fixed assets costing £151,600. The fixed assets will have a residual value of £15,160 at the end of the project. The working capital requirement is £27,700 and all of this will be recovered.
The net operating cash flows from the project will be £282,000 each year.
What is the net present value of the project when discounted at 10%?
Include working capital, and calculate your answer to the nearest £. Enter your answer without commas.
Here are my working outs:
https://imgur.com/a/SlA83DL
I’m not sure where I’m going wrong the answer should £345542
