Spruce Bank Is Planning to Automate Some of Its Back

question 100

Multiple Choice

Spruce Bank is planning to automate some of its back office functions and reduce operating costs.The installation of new computers and software will require an initial investment of $1,000,000.The savings generated because of reduced personnel cost is $200,000 per year.The bank uses an 8 percent rate of discount to evaluate cost saving projects which are expected to last 10 years.

Should the bank undertake the project given the above information?

• A)Yes,because the NPV of the project is $500,000.
• B)Yes,because the NPV of the project is $342,016.
• C)No,because the NPV of the project is -$500,000.
• D)No,because the NPV of the project is -$201,458.

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Definitions:

Relations-Oriented Behavior

Behavior that prioritizes and values the development and maintenance of positive interpersonal relationships.

Support Group

A gathering of individuals who share common experiences, challenges, or concerns, providing mutual assistance, empathy, and advice.

Women Employees

Female individuals engaged in work for an organization, focusing on their unique experiences, challenges, and contributions in the workplace.

Self Competency

The understanding and confidence in one's abilities and skills within a personal or professional context.