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Question
A new computer system is expected to cost $40 million and generate annual savings of $12 million over the next five years.
Should the bank invest in this project if the discount rate is 12 percent?
A. Yes, because the net present value of the project is $3,257,314.
B. No, because the net present value of the project is -$3,257,314.
C. Yes, because the net present value of the project is $20 million.
D. No, because the net present value of the project is -$20 million.
E. Yes, because the net present value of the project is $4,980,000.
Answer
This answer is hidden. It contains 40 characters.
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