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:

External Supply

The availability of potential job candidates outside the current workforce of an organization.

Staffing Table

A list of anticipated employment openings for each type of job.

Tax

A financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund various public expenditures.

Payroll

Payroll is the process involved in calculating and distributing wages, salaries, and tax withholdings for employees within an organization.