Bell mountain should purchase the system which year

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Reference no: EM13334571

Bell Mountain Vineyards is considering updating its current manual accounting system with a high-end electronic system. While the new accounting system would save the company money, the cost of the system continues to decline. The Bell Mountain's opportunity cost of capital is 11.6 percent, and the costs and values of investments made at different times in the future are as follows:

Year	Cost	Value of Future Savings (at time of purchase)
0	$5,000	$7,000
1	4,700	7,000
2	4,400	7,000
3	4,100	7,000
4	3,800	7,000
5	3,500	7,000

Calculate the NPV of each choice.

Bell Mountain should purchase the system which year?

Reference no: EM13334571

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