(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 net present value analysis. Both alternatives are expected to have a useful life of eight years.
-The net present value of the alternative of replacing the present system with the proposed new system is closest to:

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