Suggest when could bell mountain buy new accounting system

Reference no: EM132464

Question:

Bell Mountain Vineyards is considering updating its existing 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 refuse. The Bell Mountain's opportunity cost of capital is 14.7%, and the costs and values of investments made at different times in the future are as follows:

Year Cost Value of Future Savings

0 $5,000 $7,000

1 4,550 7,000

2 4,100 7,000

3 3,650 7,000

4 3,200 7,000

5 2,750 7,000

Determine the NPV of each choice.

The NPV of each choice is:

NPV0 = ?

NPV1 = ?

NPV2 = ?

NPV3 = ?

NPV4 = ?

NPV5 = ?

Suggest when could Bell Mountain buy the new accounting system?

Reference no: EM132464

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