32) CGI Inc. is developing a new software platform, which requires an immediate investment of $780 000 and another $260 000 in three years. Net returms expected are $450 000 after two years, $313 000 after four years, and $889 000 after six years. However, if they simply upgrade their current platform, it requires an immediate investment of S400 000, another $260 000 after two years, and $340 000 after four years. Net refurns are Sl87 500 per year for 8 years Determine the net present value at 5.9%. Which project is preferable according to the net present value criterion?

32) CGI Inc. is developing a new software platform, which requires an immediate investment of $780 000 and another $260 000 in three years. Net returms expected are $450 000 after two years, $313 000 after four years, and $889 000 after six years. However, if they simply upgrade their current platform, it requires an immediate investment of S400 000, another $260 000 after two years, and $340 000 after four years. Net refurns are Sl87 500 per year for 8 years Determine the net present value at 5.9%. Which project is preferable according to the net present value criterion?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter12: Capital Investment Decisions

Section: Chapter Questions

Problem 21BEA

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