Mathematics · Financial Mathematics
A bank is deciding whether to replace its 500 branch servers with a centralized Virtual Desktop Infrastructure (VDI). The initial cost of the VDI setup is ₹8,00,00,000. This upgrade will save the bank ₹1,50,00,000 per year in maintenance and electricity costs. Furthermore, the bank estimates that the improved security will prevent two Cyber-Frauds per year, with an average loss of ₹25,00,000 per fraud. Assuming a 5-year project life and a discount rate of 12 percent, calculate the Net Present Value (NPV) of this IT investment (rounded to the nearest lakh).
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1NPV of -₹321 Lakh
- 2NPV of ₹321 Lakh
- 3NPV of -₹79 Lakh✓
- 4NPV of ₹78 Lakh
Correct answer
NPV of -₹79 Lakh
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