A Company Must Choose Between Two New Computer Operating Systems

question 76

Multiple Choice

A company must choose between two new computer operating systems: Linux and Windows,to replace the existing system to support its ongoing operations.System Linux costs $50,000 and requires annual maintenance costs of $6,000 during its four-year life.System Windows costs $75,000 and requires annual maintenance cost of $4,500 during its six-year life.The appropriate discount rate is 8 percent.Which system should the firm choose? Assume both systems can be replicated.

• A) EANPV_L=-$21,096 > EANPV_W=-$20,724, choose system Linux
• B) EANPV_L=-$21,096 > EANPV_W=-$20,724, choose system Windows
• C) EANPV_L= -$9,096 > EANPV_W= -$11,724, choose system Linux
• D) EANPV_L= -$9,096 > EANPV_W= -$11,724, choose system Windows

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