A New Computer System Is Expected to Cost $40 Million

question 30

Multiple Choice

A new computer system is expected to cost $40 million and generate annual savings of $12 million over the next five years. Should the bank invest in this project if the discount rate is 18 percent?

• A)Yes, because the net present value of the project is $2,473,948.
• B)No, because the net present value of the project is -$2,473,948.
• C)Yes, because the net present value of the project is $24.8 million.
• D)No, because the net present value of the project is -$24.8 million.
• E)Yes, because the net present value of the project is $1,342,688.

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Definitions:

Biomedical Viewpoint

The Biomedical Viewpoint is a perspective in healthcare that focuses on biological factors in understanding and treating disease, emphasizing medication, and surgery over lifestyle changes or social factors.

Biopsychosocial Viewpoint

An approach in understanding human health and illness that considers biological, psychological, and social factors.

Health

An overall condition of good health involving physical, mental, and social factors, not just the absence of illness or frailty.

Biopsychosocial Model

An interdisciplinary model that looks at the interconnection between biology, psychology, and socio-environmental factors when assessing human development and health.