a. Suppose the discount rate in Problem 13a changes to 13 percent (.13). Perform present value analysis using the new discount rate.
b. What is your recommendation to Alamo Foods now?
c. Explain the difference between Problem 13b and Problem 14b.
Reference:
Alamo Foods of San Antonio wants to introduce a new computer system for its perishable products warehouse. The costs and benefits are as follows:
a. Given a discount rate of 8 percent (.08), perform present value analysis on the data for Alamo Foods. (Hint: Use this formula: to find the multipliers for years 1 to 6.)
b. What is your recommendation for Alamo Foods?
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