Blossom Corp. management is investigating two computer systems. The Alpha 8300 costs $3,006,625 and will...
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Blossom Corp. management is investigating two computer systems. The Alpha 8300 costs $3,006,625 and will generate cost savings of $1,548,725 in each of the next five years. The Beta 2100 system costs $4,627,500 and will produce cost savings of $1,177,750 in the first three years and then $2 million for the next two years. The companys discount rate for similar projects is 14 percent.
What is the NPV of each system? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.)
NPV of Alpha system _____
NPV of Beta system _____
Which one should be chosen based on the NPV? Blossom should chose the _______ system.
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