You are provided with the below table indicating the costs and the benefits for the system on 4 yearswith a discount factor of 15%. Calculate the Present Value (PV) for each year and fill the table.Given the formula to calculate the PV:PV, = 1/(1 + i)" where n is the number of years and i is the discount rate.The system will cost $50,000 to be developed, and once operated it will cost $75,000 for the 1st year,$82,500 for the 2nd year, $91,000 for 3rd year, and $99,500 for 4th year.The annual benefits are: $125,000 for the 1st year with an additional of $10,000 for each year afterthat, as stated in the below table.Use the cost benefit analysis technique to determine when the project pay back for its cost.Year13Discount Factor15%DevelopmentCostsOperation CostsPresent ValueCostsCumulative CostsAnnual BenefitsPresent ValueBenefitsCumulativeBenefitsCumulative: Costs+ Benefits

system cost $ 50,000 Discount Factor 15% Year Operational Cost Annual Benefit 1…

You are provided with the below table indicating the costs and the benefits for the system on 4 years with a discount factor of 15%. Calculate the Present Value (PV) for each year and fill the table. Given the formula to calculate the PV: PV = 1/(1 + i)" where n is the number of years and i is the discount rate. The system will cost $50,000 to be developed, and once operated it will cost $75,000 for the 1st year, $82,500 for the 2nd year, $91,000 for 3rd year, and $99,500 for 4th. The annual benefits are: $125,000 for the 1* year with an additional of $10,000 for each year after that, as stated in the below table. Use the cost benefit analysis technique to determine when the project pay back for its cost.

You are provided with the below table indicating the costs and the benefits for the system on 4 years with a discount factor of 15%. Calculate the Present Value (PV) for each year and fill the table. Given the formula to calculate the PV: PV = 1/(1 + i)" where n is the number of years and i is the discount rate. The system will cost $50,000 to be developed, and once operated it will cost $75,000 for the 1st year, $82,500 for the 2nd year, $91,000 for 3rd year, and $99,500 for 4th. The annual benefits are: $125,000 for the 1* year with an additional of $10,000 for each year after that, as stated in the below table. Use the cost benefit analysis technique to determine when the project pay back for its cost.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 15E: Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided...

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