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Vancouver Shakespearean Theater s board of directors is considering the replacement of the theater s lighting system The old system requires two people to operate it but the new system would

Vancouver Shakespearean Theater s board of directors is considering the replacement of the theater s lighting system. The old system requires two people to operate it, but the new system would require only a single operator. The new lighting system will cost $129,750 and save the theater $27,000 annually for the next eight years. Required: 1. Prepare a table showing the proposed lighting system s net present value for each of the following discount rates: 8 percent, 10 percent, 12 percent, 14 percent, and 16 percent. Use the following headings in your table. Comment on the pattern in the right-hand column. 2. Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: the new lighting system will cost $131,000, and the annual savings amount to $27,500?

Apr 08 2020 View more View Less

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