Final answer:
Aurora Services is evaluating a new computer system using NPV with a 12% desired return rate. Without the appropriate financial table, NPV can't be precisely calculated, but if NPV were positive, the system should be accepted.
Step-by-step explanation:
Aurora Services is considering replacing their current computer system with a new one that costs $4,000 and is expected to last 2 years, providing $2,500 in savings per year. They have a minimum desired rate of return of 12%. To decide whether to accept this proposal, we must calculate the Net Present Value (NPV) of the new system using the appropriate discount rate from an appendix or a financial table which is not provided in the question. The NPV calculation would compare the present value of the cash inflows (the annual savings) to the present value of the outflows (the cost of the new system).
However, as the exact financial table or appendix is not included in the information provided, we cannot precisely calculate the NPV in this scenario. If calculated, an NPV greater than zero would suggest that the new system should be accepted, as it would meet the company's minimum desired rate of return. Conversely, an NPV less than zero would suggest the proposal should be rejected.