A New Computer System Is Expected to Cost $40 Million

Multiple Choice

A new computer system is expected to cost $40 million and generate annual savings of $12 million over the next five years.

Should the bank invest in this project if the discount rate is 12 percent?

A) Yes,because the net present value of the project is $3,257,314.
B) No,because the net present value of the project is -$3,257,314.
C) Yes,because the net present value of the project is $20 million.
D) No,because the net present value of the project is -$20 million.