Quality Engineering Services has determined that it must update its information technology system. The system as configured no longer provides the information the company needs to remain competitive. In this case, you will critically evaluate the risk of two mutually exclusive capital investment alternatives: either to (1) install a new information technology system or (2) update the existing IT system, and then make a capital investment recommendation to Quality Engineering Services' managing partners. Your task is to develop cash flow estimates based upon good, yet incomplete information, much like a real business decision. The spreadsheet template that complements this case provides: (1) a range of net present value estimates for each option and (2) comparative distributions for you to evaluate in making a recommendation to the company's managing partners.
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Research Article| May 01 2008
Quality Engineering Services: A Capital Investment Decision
Issues in Accounting Education (2008) 23 (2): 327–342.
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Thomas L. Zeller, Brian B. Stanko; Quality Engineering Services: A Capital Investment Decision. Issues in Accounting Education 1 May 2008; 23 (2): 327–342. doi: https://doi.org/10.2308/iace.2008.23.2.327
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