In a context of a discount rate of 7% and a life project of ten years, cash flows of a negative $4,148,126 for the first year and then positive $3,441,981 for the remaining nine years, the net present value for the new automated storage and retrieval system is of $9,377,897.27. Additionally, the current value of the project cash flows is of $17,081,476.27, which is higher than the initial cost (Investopedia, 2010). This leads to the conclusion that the implementation of the project is recommendable.

From the analysis of the net present value, it is also possible to assess the project from the standpoint of its internal rate of return. The IRR for the new automated storage and retrieval system is of 83%. In optimal conditions, this figure would be compared against the value of another investment project. Yet, in the absence of an alternative, the high value of the IRR...
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