(Ignore Income Taxes in This Problem

question 40

Multiple Choice

(Ignore income taxes in this problem.) 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:
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 net present value of the alternative of purchasing the new system is closest to:

• A) $(1,076,495)
• B) $(1,236,495)
• C) $(1,169,895)
• D) $(969,895)

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