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# Dr James Andrews

Assignment 3: Time Value of Money Calculations

The IT department has requested an update in its server population. This upgrade is required to maintain a competitive position. The CEO has asked that you evaluate the project and submit a recommendation to her, in terms of whether the company should move forward with this request. The calculated value of the project is a reduction of expenses, including power and replacement costs, as shown in Table-1:

Assume the impact after five years to be immeasurable. The cost of capital to the firm is currently 8% and the cost of the project today is $286,000.Required:

- Calculate the net present value of the project
- Calculate the internal rate of return
- Calculate the payback period
- Calculate the discounted payback period

Submit an Excel file with your calculations, and a 2-to-5-page paper that explains the calculations and provides your final assessment and decision. Justify your recommendations. The paper must be submitted as a Word document and it must follow APA style guidelines.

Use the following file naming conventions: MS Word: LastnameFirstInitial_M1_A3.doc MS Excel: LastnameFirstInitial_M1_A3.Excel.xls

For example, if your name is John Smith, your document will be named SmithJ_M1_A3.doc ( and LastnameFirstInitial_M1_A3.Excel.xls)

By **Wednesday, March 29, 2017**, deliver your assignments to the **M1: Assignment 3 Dropbox**.