The net present value of the alternative of purchasing the new system is:

A) ($969,895) .
B) ($1,169,895) .
C) ($1,076,495) .
D) ($1,236,495) .

Total Cost Approach

A decision-making process that considers the total direct and indirect costs associated with a purchase or investment, rather than just the acquisition price.

Discount Rate

The interest rate charged by central banks on loans to commercial banks or the rate used in discounted cash flow analysis to determine the present value of future cash flows.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a company's assets over their life up to a specific point in time.