Assume Monetary Benefits Of An Information System Of 50 000 The First Year And 2857405

Assume monetary benefits of an information system of $50,000 the first year and increasing benefits of $5,000 a year for the next four years (year 1 = 50,000; year 2- 55,000; year 3 = 60,000; year 4 = 65,000; year 5 – 70,000). One-time development costs were $90,000 and recurring costs beginning in year 1 were $40,000 over the duration of the system’s life. The discount rate for the company was 10 percent. Using a 5-year horizon, calculate the net present value of these costs and benefits. Also calculate the overall return on investment of the project and then present a break-even analysis. At what point does break-even occur?

  1. Prepare a worksheet (in MS Excel) for the economic analysis. Choose appropriate format for the worksheet. Use currency symbols for the numbers indicating monetary values. You must use formula (MS Excel) for your calculations in the worksheet.
  2. Save the worksheet as Assignment1_your name and submit it via Blackboard.

Criteria Points Format of the worksheet 1 Entering correct data 3 Using correct formulae to calculate PVs 2 Using correct formulae to calculate NPV 1 Using correct formulae to calculate ROI 1 Using correct formulae to calculate BEP 1 Using correct formulae for other calculations 1 Total 10