What would happen to the present worth of the software

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A new software package is expected to improve productivity at Suretown Insurance. However, because of training and implementation costs, savings are not expected to occur until the third year of operation.

Annual savings of approximately $10 000 are expected, increasing by about Si000 per year for the following five years. After this time (eight years from implementation), the software will be abandoned with no scrap value.

Construct a sensitivity graph showing what would happen to the present worth of the software with 7.5% and 15% increases and decreases in the interest rate, the $10 000 base savings, and the Si000 savings gradient. MARR is 15%.

Reference no: EM131374789

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