Network Service Centre Is Considering Purchasing a New Computer Network

question 132

Essay

Network Service centre is considering purchasing a new computer network for $82 000.It will require additional working capital of $13 000.Its anticipated eight-year life will generate additional client revenue of $33 000 annually with operating costs,excluding depreciation,of $15 000.At the end of eight years,it will have a salvage value of $9500 and return $5000 in working capital.Ignore taxes.
Required:
a.If the company has a required rate of return of 14%,what is the net present value of the proposed investment?
b.What is the internal rate of return?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

---

Definitions:

Word Choices

The selection of specific words to convey meaning in writing or speech effectively.

Plagiarism

The practice of taking someone else's work or ideas and passing them off as one's own without proper acknowledgment.

Thesis Statement

A concise summary of the main point or claim of an essay or research paper, usually presented at the beginning.

Supporting Evidence

Information or facts that strengthen or back up an argument, claim, or idea.