Westland College Has a Telephone System That Is in Poor

question 305

Multiple Choice

Westland College has a telephone system that is in poor condition. The system either can be overhauled or replaced with a new system. The following data have been gathered concerning these two alternatives (Ignore income taxes.) : Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.Westland College uses a 10% discount rate and the total cost approach to capital budgeting analysis. Both alternatives are expected to have a useful life of eight years.
The working capital would be released for use elsewhere when the project is completed.
The net present value of the alternative of overhauling the present system is closest to:

• A) $(1,279,316)
• B) $(1,119,316)
• C) $801,284
• D) $(1,194,036)

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Definitions:

Distance from Campus

A measure of the physical space or the length of the journey between a specific location and the educational institution's premises.

College Major

A college major is a specialized area of study at an undergraduate level, defining a focus for the student's educational path.

Grouped Frequency Distribution

A frequency distribution where data is divided into intervals or groups, making it easier to observe patterns in large data sets.

Number of Intervals

Refers to divisions in a range of data, often used in histogram construction for data analysis.