Calculate the present value of net cash flows

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Question - Hillsdale is considering two options for comparable computer software. Option A will cost $28,000 plus annual license renewals of $1,500 for three years, which includes technical support. Option B will cost $18,000 with technical support being an add-on charge. The estimated cost of technical support is $4,800 the first year, $3,800 the second year, and $2,800 the third year. Assume the software is purchased and paid for at the beginning of year one, but that technical support is paid for at the end of each year. The discount rate is 7%. Ignore income taxes.

Calculate the present value of net cash flows.

Reference no: EM132045760

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