A New Computer System Is Expected to Cost $40 Million

question 46

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.

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Definitions:

Continued Education

The pursuit of learning and acquiring new skills or knowledge, typically after completing formal education, often required in various professions for maintaining licensure.

Continuing Education

Structured post-secondary learning experiences, often required in various professions to maintain a level of competency.

Clock Hours

The actual hours as shown on a clock, used to measure time in a linear fashion.

Good Grooming

The practice of personal hygiene and cleanliness, along with maintaining an appropriate and neat appearance.