CGI Inc Is Developing a New Software Platform, Which Requires an an Immediate

question 71

Multiple Choice

CGI Inc. is developing a new software platform, which requires an immediate investment of $780 000 and another $260 000 in three years. Net returns expected are $450 000 after two years, $313 000 after four years, and $889 000 after six years. However, if they simply upgrade their current platform, it requires an immediate investment of $400 000, another $260 000 after two years, and $340 000 after four years. Net returns are $187 500 per year for 8 years. Determine the net present value at 5.9%. Which project is preferable according to the net present value criterion?

• A) New Software platform by $53 309
• B) Upgrade by $53 309
• C) Upgrade by $277 277
• D) New Software platform by $70 203
• E) New Software platform by $76 599

---

Definitions:

Ectothermic Animals

Organisms that regulate their body temperature through external sources, unable to internally maintain a constant body temperature.

External Environment

The conditions, entities, and factors surrounding and affecting an organism or system outside of its immediate physical location.

Body Temperature

The measure of the body's ability to generate and get rid of heat, necessary for maintaining metabolic processes.

Blood Vessels

Tubular structures in the circulatory system through which blood flows, including arteries, veins, and capillaries, crucial for transporting nutrients, oxygen, and waste materials.