Find what is the present value of the total net cash flows

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An upgraded point-of-sale system is being considered by a firm. The firm would be incurring P300,000 for the purchase and installation of the system. Additionally, a one-time training fee of P10,000 will be incurred by firm. The system is expected to be used over a period of 5 years. Annual maintenance fee at the end of the second, third and fourth years will be P20,000, P25,000 and P25,000 respectively.

The relevant interest rate is 8%.

Required:

Question 1. What is the present value of the total net cash flows relating to the acquisition and use of the point-of-sale system?

Question 2. What is the equivalent annual cost of the system?

Reference no: EM132650866

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