
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
النسخة 1الرقم المعياري الدولي: 978-0538736787
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
النسخة 1الرقم المعياري الدولي: 978-0538736787 تمرين 4
NPV Versus IRR
Covington Pharmacies has decided to automate its insurance claims process. Two networked computer systems are being considered. The systems have an expected life of two years. The net cash flows associated with the systems are as follows. The cash benefits represent the savings created by switching from a manual to an automated system.
The company's cost of capital is 10 percent.
Required:
1. Compute the NPV and the IRR for each investment.
2. Show that the project with the larger NPV is the correct choice for the company.
Covington Pharmacies has decided to automate its insurance claims process. Two networked computer systems are being considered. The systems have an expected life of two years. The net cash flows associated with the systems are as follows. The cash benefits represent the savings created by switching from a manual to an automated system.
The company's cost of capital is 10 percent.
Required:
1. Compute the NPV and the IRR for each investment.
2. Show that the project with the larger NPV is the correct choice for the company.
التوضيح
1.
Calculate NPV for system I:
Calcul...
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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