Martin is working to develop a preliminary costAc?obenefit analysis for a system. He has identified a number of cost factors and values for the new system, summarized in the following tables:
2 Systems Analysts 400 hours/ea @ $50/hour =
4 Programmer Analysts 250 hours/ea @ $35/hour
1 GUI Designer 200 hours/ea @ $40/hour
1 Telecommunications Specialist 50 hours/ea @ a$50/hour
1 System Architect 100 hours/ea @ $50/hour
1 Database Specialist 15 hours/ea @ $45/hour
1 System Librarian 250 hours/ea @ $15/hour
4 Oracle training registration $3500/student
Development CostsAc??New Hardware and Software
1 Development server $18,700
1 Server software (OS, misc.) $1500
1 DBMS server software $7500
7 DBMS client software $950/client
Annual Operating CostsAc??Personnel
2 Programmer Analysts 125 hours/ea @ $35/hour
1 System Librarian 20 hours/ea @ $15/hour
Annual Operating CostsAc??Hardware, Software, and Misc.
1 Maintenance agreement for server $995
1 Maintenance agreement for server $525
Preprinted forms 15,000/year @ $.22/form =$3300/year
The benefits of the new system are expected to come from two sources: increased sales and lower inventory levels. Sales are expected to increase by $60000 in the first year of the systemAc?cs operation and will grow at a rate of 10% each year thereafter. Savings from lower inventory levels are expected to be$15,000 per year for each year of the projectAc?cs life.
Using a format similar to the spreadsheets in this chapter, develop a spreadsheet that summarizes this projectAc?cs cash flow, assuming a after the project is developed. Compute the present value of the cash flows, using an interest rate of 6%.
1. What is the NPV for this project?
2. What is the ROI for this project?
3. What is the break-even point? Should this project be accepted by the approval committee?
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more