What is the present value of the total net cash flows

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Reference no: EM132649891

COST ACCOUNTING

The relevant interest rate is 8%.

Required:

An upgraded point-of-sale system is being considered by a firm. The firm would be incurring $300,000 for the purchase and installation of the system. Additionally, a one-time training fee of $10,000 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 $20,000, $25,000 and $25,000 respectively.

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

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

Reference no: EM132649891

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