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An Investment of $24,000 on a New Computer System Should

Question 121

Multiple Choice

An investment of $24,000 on a new computer system should increase annual profit by $8,000 for the first three years and $12,000 for the following two years. We expect it to be obsolete after five years. If a return of 25% compounded annually is required, what is the Net Present Value of this computer system?


A) ($463)
B) $463
C) $2,794
D) ($2,794)
E) $9,278

Correct Answer:

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