Champlain Corp. is investigating two computer systems. The Alpha 8300 costs $3,1

Question

Champlain Corp. is investigating two computer systems. The Alpha 8300 costs $3,159,153 and will generate cost savings of $1,121,703 in each of the next five years. The Beta 2100 system costs $4,291,088 and will produce cost savings of $1,012,773 in the first three years and then $2 million for the next two years. If the company's discount rate for similar projects is 14 percent: What is the NPV for the two systems? (Enter negative amounts using negative sign, e.g. -45.25. Round answers to 2 decimal places, e.g. 15.25.)

NPV of Alpha system?

NPV of Beta system?

Which one should be chosen based on the NPV?

Explanation / Answer

NPV of Alpha system? 691744.22

NPV of Beta system? 283096.12

Which one should be chosen based on the NPV? Alpha System

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