(Ignore Income Taxes in This Problem

Multiple Choice

(Ignore income taxes in this problem.) Allen College has a telephone system that is in poor condition. The system can be either overhauled or replaced with a new system. The following data have been gathered concerning these two alternatives:
Allen College uses a 12% discount rate and the total cost approach to capital budgeting analysis. Both alternatives are expected to have a useful life of eight years. The net present value of the new system alternative is

A) £(233,300) .
B) £(283,300) .
C) £(263,100) .
D) £(273,100) .