Discounted Cash Flows - Evaluating Network Migration

Oceanic Organization   is   assessing   two   equally   Elite   Remodeled Designs with a three-­-year target completion scenarios.       Each migration requires   an   investment   of   $10,000.     The   Network Migration had the   following   cash   inflows   received   at   the   end   of   each   year.  

                            YEAR             REMODELED                        REMODELED

                                                    DESIGNS 1                              DESIGNS 2  

                                 1                     $2,000                                            $6,000  

                                 2                        4,000                                          4,000

                                 3                        6,000                                          2,000

                           TOTAL             $12,000                                           $12,000

a. What is the   net   present   value   of   each REMODELED DESIGNS using   an   8%   discount   rate.  

b. What is the   effect the timing   of   the   cash   flows   have on a given REMODELED DESIGNS net present   value?  

c. What is   the   payback   of   this   investment   if   the   annual   inflow   was   an   even   $4,000   per  

year.