1. Asnwer the following questions based on the graph
a) assume discount rate of 15%. What is the overall NPV. Should the company move on with the project? Explain.
b) Do the same with 30%
c) Assume the recurring value of the benefits due to increased sales was overly optimistic and net income due to increased sales is only $500,000 instead of $1,000,000. Assuming a discount rate of 15%, what is the overall net present value for the project? Should SSB move forward with the project and proceed with implementing SAP? Explain your answer.
d) do the same with 30%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% $500,000 $4,375,000.00 $3,397,776.48 $2,550,716.67 $1,813,737.43 $1,170,163.17 $606,105.17 $109,960.61 ($327,992.88) ($715,926.30) ($1,060,727.17) ($1,368.218.14) ($1,643,335.94) ($1,890,278.19) ($2,112,624.21) ($2,313,434.72) ($2,495,334.26) ($2,660,579.55) ($2,811.116.33) ($2,948,626.75) ($3,074,568.93) ($3.190,210.13) $600,000 $700,000 $800,000 $6,375,000 $8,375,000.00 $10,375,000.00 $5,202.332 $7,006,887.08 $8,811,442.37 $4,185,860 $5,821,003.34 $7,456.146.68 $3,301,485 $4,789,232.40 $6,276,979.89 $2,529,196 $3,888,228.44 $5,247,261.08 $1,852.326 $3,098,547.24 $4,344,768.27 $1,256,953 $2,403,944.85 $3,550,936.97 $731,409 $1,790,809.97 $2,850,211.40 $265,888 $1,247,703.19 $2,229,517.93 ($147.873) $764,981.97 $1,677,836.54 ($516,862) $334,494.60 $1,185,850.98 ($847,003) ($50,670.32) $745,662.49 ($1,143,334) ($396,389.46) $350,554.90 ($1,410,149) ($707,673.90) ($5,198.74) ($1,651.122) ($988,808.61) ($326,495.56) ($1,869,401) ($1,243.467.97) ($617.534.82) ($2,067.695) ($1,474,811.37) (5881,927.28) ($2,248,340) ($1,685,562.86) ($1,122,786.13) ($2,413,352) ($1,878,077.45) ($1,342,802.80) ($2,564,483) ($2,054,396.50) ($1,544,310.29) ($2,703,252) ($2,216,294.19) ($1,729,336.21) $900,000 $12.375,000 $10,615,998 $9,091,290 $7,764,727 $6,606,294 $5,590,989 $4,697,929 $3,909,613 $3,211,333 $2,590,691 $2,037,207 $1,541,995 $1,097,499 $697,276 $335,817 $8,398 ($289,043) ($560,009) ($807.528) ($1,034,224) ($1,242.378) M DOO DOO 9998 290 727 294 989 9929 613 333 691 207 995 499 276 817 398 043) 009) 528) 224) 378) $1,000,000 $14,375,000.00 $12,420,552.97 $10,726,433.34 $9,252,474.86 $7,965,326,34 $6,837,210.34 $5,844,921.22 $4,969,014.25 $4,193,147.41 $3,503,545.67 $2,888,563.72 $2,338,328.12 $1,844,443.62 $1,399,751.58 $998,130.55 $634,331.47 $303,840.90 $2,767.34 ($272,253.50) ($524,137.86) ($755,420.27) $1,100,000 $16,375,000.00 $14,225,108.26 $12,361,576.68 $10,740,222.35 $9,324,358.98 $8,083,431.38 $6,991,913.34 $6,028,415.67 $5,174,962.15 $4,416,400.24 $3,739,920.09 $3,134,660.93 $2,591,387.99 $2,102,226.74 $1,660,443.61 $1,260,264.62 $896,724.99 $565,544.07 $263,021.15 ($14,051.65) ($268,462.29) $1,200,000 $1,300,000 $1,400,000 $18,375,000 $20,375,000.00 $22,375,000.00 $16,029,664 $17,834,218.86 $19,638,774.15 $13,996,720 $15,631,863.35 $17,267,006.68 $12,227,970 $13,715,717.32 $15,203,464.80 $10,683,392 $12,042,424.25 $13,401,456.88 $9,329,652 $10,575,873.45 $11,822,094.48 $8,138,905 $9,285,897.58 $10,432,889.71 $7,087,817 $8,147,218.52 $9,206,619.94 $6,156,777 $7,138,591.63 $8,120,406.37 $5,329,255 $6,242, 109.37 $7,154,963.94 $4,591,276 $5,442,632.84 $6,293,989.21 $3,930,994 $4,727,326.55 $5,523,659.36 $3,338,332 $4,085,276.71 $4,832,221.07 $2,804,702 $3,507,177.05 $4,209,652.21 $2,322,757 $2,985,069.72 $3,647,382.77 $1,886,198 $2,512,130.92 $3,138,064.06 $1,489,609 $2,082,493.17 $2,675,377.26 $1,128,321 $1,691,097.54 $2,253,874.27 $798,296 $1,333,570.45 $1,868,845.10 $196,035 $1,006,120.78 $1,516,206.99 $218,496 $705,453.65 $1,192,411.63 $1,500,000 $24,375,000 $21,443,329 $18,902,150 $16,691,212 $14,760,490 $13,068,316 $11,579,882 $10,266,021 $9,102,221 $8,067,819 $7,145,346 $6,319,992 $5,579,165 $4,912,127 $4,309,696 $3,763,997 $3,268,261 $2,816,651 $2,404,120 $2,026,293 $1,679,370 $38 $34 $3c .000 000 329 150 212 490 316 882 021 221 819 346 992 165 127 696 997 261 651 120 293 370 $1,600,000 $1,700,000 $1,800,000 $1,900,000 $2,000,000 $26,375,000.00 $28,375,000.00 $30,375,000 $32,375,000.00 $34,375,000.00 $23,247,884.75 $25,052,440.04 $26,856,995 $28,661,550.64 $30,466,105.93 $20,537,293.35 $22,172,436.69 $23,807,580 $25,442,723.35 $27,077,866.69 $18,178,959.78 $19,666,707.26 $21,154,455 $22,642,202.23 $24,129,949.72 $16,119,522.15 $17,478,554.79 $18,837,587 $20,196,620.06 $21,555,652.69 $14,314,536.55 $15,560,757.58 $16,806,979 $18,053,199.65 $19,299,420.69 $12,726,873.95 $13,873,866.07 $15,020,858 $16,167,850.32 $17,314,842.44 $11,325,422.79 $12,384,824.22 $13,444,226 $14,503,627.07 $15,563,028.49 $10,084,035.85 $11,065,850.59 $12,047,665 $13,029,480.07 $14,011,294.81 $8,980,673.07 $9,893,527.64 $10,806,382 $11,719,236.77 $12,632,091.34 $7,996,701.95 $8,848,058.32 $9,699,415 $10,550,771.07 $11,402,127.44 $7,116,324.99 $7,912,657.80 $8,708,991 $9,505,323.42 $10,301,656.23 $6,326,109.80 $7,073,054.16 $7,819,999 $8,566,942.89 $9,313,887.25 $5,614,602.52 $6,317,077.68 $7,019,553 $7,722,028.00 $8,424,503.16 $4,972,008.88 $5,634,321.94 $6,296,635 $6,958,948.05 $7,621,261.10 $4,389,930.36 $5,015,863.51 $5,641,797 $6,267,729.80 $6,893,662.95 $3,861,145.44 $4,454,029.53 $5,046,914 $5,639,797.71 $6,232,681.80 $3,379,427.74 $3,942,204.47 $4,504,981 $5,067,757.94 $5,630,534.67 $2,939,394.40 $3,474,669.05 $4,009,944 $4,545,218.34 $5,080,492.99 $2,536,379.42 $3,046,465.63 $3,556,552 $4,066,638.06 $4,576,724.27 $2,166,327.57 $2,653,285,55 $3,140,244 $3,627,201.49 $4,114,159.47 Economic Feasibility Sensitivitu. Anak $2,100,000 $36,375,000 $32,270,661 $28,713,010 $25,617,697 $22,914,685 $20,545,642 $18,461,835 $16,622,430 $14,993,110 $13,544,946 $12,253,484 $11,097,989 $10,060,832 $9,126,978 $8,283,574 $7,519,596 $6,825,566 $6,193,311 $5,615,768 $5,086,810 $4,601,117 $27 $24 $21 $19. $17 $15, $14, $13, $11, $10,8 $9,8 $8,9 $8,1 $7,4 $6,7 $6,1 $5,59 $5,08 000,000 5,000.00 -,105.93 ,866.69 ,949.72 ,652.69 420.69 842.44 _028.49 .294.81 091.34 127.44 656.23 887.25 503.16 261.10 662.95 681.80 534.67 192.99 724.27 159.47 easibility $2,100,000 $2,200,000 $2,300,000 $36,375,000 $38,375,000.00 $40,375,000.00 $32,270,661 $34,075,216.53 $35,879,771.82 $28,713,010 $30,348,153.36 $31,983,296.69 $25,617,697 $27,105,444.69 $28,593,192.18 $22,914,685 $24,273,717.96 $25,632,750.59 $20,545,642 $21,791,862.75 $23,038,083.79 $18,461,835 $19,608,826.68 $20,755,818.80 $16,622,430 $17,681,831.34 $18,741,232.76 $14,993,110 $15,974,924.30 $16,956,739.04 $13,544,946 $14,457,800.47 $15,370,655.04 $12,253,484 $13,104,840.18 $13,956,196.56 $11,097,989 $11,894,321.86 $12,690,654.67 $10,060,832 $10,807,775.97 $11,554,720.34 $9,126,978 $9,829,453.47 $10,531,928.63 $8,283,574 $8,945,887.21 $9,608,200.27 $7,519,596 $8,145,529.24 $8,771,462.39 $6,825,566 $7,418,449.98 $8,011,334.07 $6,193,311 $6,756,088.14 $7,318,864.87 $5,615,768 $6,151,042.29 $6,686,316.94 $5,086,810 $5,596,896.70 $6,106,982.91 $4,601,117 $5,088,075.41 $5,575,033.39 Sensitivitu. Annlinin $2,400,000 $2,500,000 $42,375,000 $44,375,000.00 $37,684,327 $39,488,882.42 $33,618,440 $35,253,583.36 $30,080,940 $31,568,687.15 $26,991,783 $28,350,815.86 $24,284,305 $25,530,525.86 $21,902,811 $227949,803.05 $19,800,634 $20,860,035.61 $17,938,554 $18,920,368.52 $16,283,510 $17,196,364.17 $14,807,553 $15,658,909.30 $13,486,987 $14,283,320.29 $12,301,665 $13,048,609.06 $11,234,404 $11,936,878.95 $10,270,513 $10,932,826.38 $9,397,396 $10,023,328.68 $8,604,218 $9,197,102.25 $7,881,642 $8,444,418.34 $7,221,592 $7,756,866.24 $6,617,069 $7,127,155.34 $6,061,991 $6,548,949.33 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% $500,000 $4,375,000.00 $3,397,776.48 $2,550,716.67 $1,813,737.43 $1,170,163.17 $606,105.17 $109,960.61 ($327,992.88) ($715,926.30) ($1,060,727.17) ($1,368.218.14) ($1,643,335.94) ($1,890,278.19) ($2,112,624.21) ($2,313,434.72) ($2,495,334.26) ($2,660,579.55) ($2,811.116.33) ($2,948,626.75) ($3,074,568.93) ($3.190,210.13) $600,000 $700,000 $800,000 $6,375,000 $8,375,000.00 $10,375,000.00 $5,202.332 $7,006,887.08 $8,811,442.37 $4,185,860 $5,821,003.34 $7,456.146.68 $3,301,485 $4,789,232.40 $6,276,979.89 $2,529,196 $3,888,228.44 $5,247,261.08 $1,852.326 $3,098,547.24 $4,344,768.27 $1,256,953 $2,403,944.85 $3,550,936.97 $731,409 $1,790,809.97 $2,850,211.40 $265,888 $1,247,703.19 $2,229,517.93 ($147.873) $764,981.97 $1,677,836.54 ($516,862) $334,494.60 $1,185,850.98 ($847,003) ($50,670.32) $745,662.49 ($1,143,334) ($396,389.46) $350,554.90 ($1,410,149) ($707,673.90) ($5,198.74) ($1,651.122) ($988,808.61) ($326,495.56) ($1,869,401) ($1,243.467.97) ($617.534.82) ($2,067.695) ($1,474,811.37) (5881,927.28) ($2,248,340) ($1,685,562.86) ($1,122,786.13) ($2,413,352) ($1,878,077.45) ($1,342,802.80) ($2,564,483) ($2,054,396.50) ($1,544,310.29) ($2,703,252) ($2,216,294.19) ($1,729,336.21) $900,000 $12.375,000 $10,615,998 $9,091,290 $7,764,727 $6,606,294 $5,590,989 $4,697,929 $3,909,613 $3,211,333 $2,590,691 $2,037,207 $1,541,995 $1,097,499 $697,276 $335,817 $8,398 ($289,043) ($560,009) ($807.528) ($1,034,224) ($1,242.378) M DOO DOO 9998 290 727 294 989 9929 613 333 691 207 995 499 276 817 398 043) 009) 528) 224) 378) $1,000,000 $14,375,000.00 $12,420,552.97 $10,726,433.34 $9,252,474.86 $7,965,326,34 $6,837,210.34 $5,844,921.22 $4,969,014.25 $4,193,147.41 $3,503,545.67 $2,888,563.72 $2,338,328.12 $1,844,443.62 $1,399,751.58 $998,130.55 $634,331.47 $303,840.90 $2,767.34 ($272,253.50) ($524,137.86) ($755,420.27) $1,100,000 $16,375,000.00 $14,225,108.26 $12,361,576.68 $10,740,222.35 $9,324,358.98 $8,083,431.38 $6,991,913.34 $6,028,415.67 $5,174,962.15 $4,416,400.24 $3,739,920.09 $3,134,660.93 $2,591,387.99 $2,102,226.74 $1,660,443.61 $1,260,264.62 $896,724.99 $565,544.07 $263,021.15 ($14,051.65) ($268,462.29) $1,200,000 $1,300,000 $1,400,000 $18,375,000 $20,375,000.00 $22,375,000.00 $16,029,664 $17,834,218.86 $19,638,774.15 $13,996,720 $15,631,863.35 $17,267,006.68 $12,227,970 $13,715,717.32 $15,203,464.80 $10,683,392 $12,042,424.25 $13,401,456.88 $9,329,652 $10,575,873.45 $11,822,094.48 $8,138,905 $9,285,897.58 $10,432,889.71 $7,087,817 $8,147,218.52 $9,206,619.94 $6,156,777 $7,138,591.63 $8,120,406.37 $5,329,255 $6,242, 109.37 $7,154,963.94 $4,591,276 $5,442,632.84 $6,293,989.21 $3,930,994 $4,727,326.55 $5,523,659.36 $3,338,332 $4,085,276.71 $4,832,221.07 $2,804,702 $3,507,177.05 $4,209,652.21 $2,322,757 $2,985,069.72 $3,647,382.77 $1,886,198 $2,512,130.92 $3,138,064.06 $1,489,609 $2,082,493.17 $2,675,377.26 $1,128,321 $1,691,097.54 $2,253,874.27 $798,296 $1,333,570.45 $1,868,845.10 $196,035 $1,006,120.78 $1,516,206.99 $218,496 $705,453.65 $1,192,411.63 $1,500,000 $24,375,000 $21,443,329 $18,902,150 $16,691,212 $14,760,490 $13,068,316 $11,579,882 $10,266,021 $9,102,221 $8,067,819 $7,145,346 $6,319,992 $5,579,165 $4,912,127 $4,309,696 $3,763,997 $3,268,261 $2,816,651 $2,404,120 $2,026,293 $1,679,370 $38 $34 $3c .000 000 329 150 212 490 316 882 021 221 819 346 992 165 127 696 997 261 651 120 293 370 $1,600,000 $1,700,000 $1,800,000 $1,900,000 $2,000,000 $26,375,000.00 $28,375,000.00 $30,375,000 $32,375,000.00 $34,375,000.00 $23,247,884.75 $25,052,440.04 $26,856,995 $28,661,550.64 $30,466,105.93 $20,537,293.35 $22,172,436.69 $23,807,580 $25,442,723.35 $27,077,866.69 $18,178,959.78 $19,666,707.26 $21,154,455 $22,642,202.23 $24,129,949.72 $16,119,522.15 $17,478,554.79 $18,837,587 $20,196,620.06 $21,555,652.69 $14,314,536.55 $15,560,757.58 $16,806,979 $18,053,199.65 $19,299,420.69 $12,726,873.95 $13,873,866.07 $15,020,858 $16,167,850.32 $17,314,842.44 $11,325,422.79 $12,384,824.22 $13,444,226 $14,503,627.07 $15,563,028.49 $10,084,035.85 $11,065,850.59 $12,047,665 $13,029,480.07 $14,011,294.81 $8,980,673.07 $9,893,527.64 $10,806,382 $11,719,236.77 $12,632,091.34 $7,996,701.95 $8,848,058.32 $9,699,415 $10,550,771.07 $11,402,127.44 $7,116,324.99 $7,912,657.80 $8,708,991 $9,505,323.42 $10,301,656.23 $6,326,109.80 $7,073,054.16 $7,819,999 $8,566,942.89 $9,313,887.25 $5,614,602.52 $6,317,077.68 $7,019,553 $7,722,028.00 $8,424,503.16 $4,972,008.88 $5,634,321.94 $6,296,635 $6,958,948.05 $7,621,261.10 $4,389,930.36 $5,015,863.51 $5,641,797 $6,267,729.80 $6,893,662.95 $3,861,145.44 $4,454,029.53 $5,046,914 $5,639,797.71 $6,232,681.80 $3,379,427.74 $3,942,204.47 $4,504,981 $5,067,757.94 $5,630,534.67 $2,939,394.40 $3,474,669.05 $4,009,944 $4,545,218.34 $5,080,492.99 $2,536,379.42 $3,046,465.63 $3,556,552 $4,066,638.06 $4,576,724.27 $2,166,327.57 $2,653,285,55 $3,140,244 $3,627,201.49 $4,114,159.47 Economic Feasibility Sensitivitu. Anak $2,100,000 $36,375,000 $32,270,661 $28,713,010 $25,617,697 $22,914,685 $20,545,642 $18,461,835 $16,622,430 $14,993,110 $13,544,946 $12,253,484 $11,097,989 $10,060,832 $9,126,978 $8,283,574 $7,519,596 $6,825,566 $6,193,311 $5,615,768 $5,086,810 $4,601,117 $27 $24 $21 $19. $17 $15, $14, $13, $11, $10,8 $9,8 $8,9 $8,1 $7,4 $6,7 $6,1 $5,59 $5,08 000,000 5,000.00 -,105.93 ,866.69 ,949.72 ,652.69 420.69 842.44 _028.49 .294.81 091.34 127.44 656.23 887.25 503.16 261.10 662.95 681.80 534.67 192.99 724.27 159.47 easibility $2,100,000 $2,200,000 $2,300,000 $36,375,000 $38,375,000.00 $40,375,000.00 $32,270,661 $34,075,216.53 $35,879,771.82 $28,713,010 $30,348,153.36 $31,983,296.69 $25,617,697 $27,105,444.69 $28,593,192.18 $22,914,685 $24,273,717.96 $25,632,750.59 $20,545,642 $21,791,862.75 $23,038,083.79 $18,461,835 $19,608,826.68 $20,755,818.80 $16,622,430 $17,681,831.34 $18,741,232.76 $14,993,110 $15,974,924.30 $16,956,739.04 $13,544,946 $14,457,800.47 $15,370,655.04 $12,253,484 $13,104,840.18 $13,956,196.56 $11,097,989 $11,894,321.86 $12,690,654.67 $10,060,832 $10,807,775.97 $11,554,720.34 $9,126,978 $9,829,453.47 $10,531,928.63 $8,283,574 $8,945,887.21 $9,608,200.27 $7,519,596 $8,145,529.24 $8,771,462.39 $6,825,566 $7,418,449.98 $8,011,334.07 $6,193,311 $6,756,088.14 $7,318,864.87 $5,615,768 $6,151,042.29 $6,686,316.94 $5,086,810 $5,596,896.70 $6,106,982.91 $4,601,117 $5,088,075.41 $5,575,033.39 Sensitivitu. Annlinin $2,400,000 $2,500,000 $42,375,000 $44,375,000.00 $37,684,327 $39,488,882.42 $33,618,440 $35,253,583.36 $30,080,940 $31,568,687.15 $26,991,783 $28,350,815.86 $24,284,305 $25,530,525.86 $21,902,811 $227949,803.05 $19,800,634 $20,860,035.61 $17,938,554 $18,920,368.52 $16,283,510 $17,196,364.17 $14,807,553 $15,658,909.30 $13,486,987 $14,283,320.29 $12,301,665 $13,048,609.06 $11,234,404 $11,936,878.95 $10,270,513 $10,932,826.38 $9,397,396 $10,023,328.68 $8,604,218 $9,197,102.25 $7,881,642 $8,444,418.34 $7,221,592 $7,756,866.24 $6,617,069 $7,127,155.34 $6,061,991 $6,548,949.33
