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A new computer system will require an initial outlay of $17,500, but it will increase the firms cash flows by $3,500 a year for each of the next 8...
A new computer system will require an initial outlay of $17,500, but it will increase the firms cash flows by $3,500 a year for each of the next 8 years. a.Calculate the NPV and find out if the system worth installing if the required rate of return is 9%? What if it is 14%? I know the correct answers are 1871.87 at 9% and -1263.98 at 14%. However, When I do it, I get the wrong answer and I do it like this:0-17500 =npv(9%, -17500, 3500...3500...) 13500 = 1,717.13 23500 33500 43500 =npv(14%, -17500, 3500...3500...) 53500 =-1108.75 63500 73500 83500 Can anyone explan step by step how to calculate an NPV?
