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2. You are responsible for doing an NPV, ROI and Break-even analysis for the Accident and Emergency information system project. The infonnaljon system has a
2. You are responsible for doing an NPV, ROI and Break-even analysis for the Accident and Emergency information system project. The infonnaljon system has a projected lifespan of 6 years. Assume estimated monetary benets that can be attributed to the system of $30m in the rst year Q year 1, the year after the current year, which is year {it with those benets increasing by $1 Drn a year for the next 3 years and then decreasing $20m a year for the remainder. One-time development and procurement costs are $4Dm in the current year (year 0) and recurring costs {beginning in year '1) are estimated to start at $1Um a year and increase by 10% per year over F RICOS Provider No. 00120:: L the duration of the system's scheduled life. The discount rate the company concerned uses is 5 percent. This project is using newr technology and involves a medical community who have not used the system before. The Nurses Union and Medical Association is supportive as they have been calling for investments in A&E for many y Note that a spreadsheet is ideal for working out the answer to a question like this. You can nd such a spreadsheet on the course 1Wattle website. You are not assessed on your ability to do maths, many of the calculations are done in formulas, so just ll in the shaded cells for discount rate, benets and costs. Complete the spreadsheet to calculate the net present value, return on investment and present a break-even analysis for the proposed information system. Thinlr carefully about how to present this information within the single file you submit (g; copy and paste the chart to show BEA but still include discussion to explain gures). 3. Think about what the results you obtained in answer to question 2 tells you about the project feasibility. Briey explain why this proposed project should or should not be considered as feasible. Note: Remember to use in-text citations when referencing. h :lewanu-edu.aulstudentslleamin {levelo mentlandemicint n' lreferencin Break-Even Analysis $25,000,000,000.00 $20,000,000,000.00 $20,367 199,071.53 $18,874,768,278.26 $15,000,000,000.00 $15,740,663,612.38 $9,237,534,527.18 $10,439,321,885.62 PVbenefits $10,000,000,000.00 $8,090,373 866.86. $10,804,448,763.63 - PVcosts $6,995,356,872.91 $5,950,113,378.68 $5,000,000,000.04,952,380,952.38 $6,485,260,770.98 $4,000 000,000.00 $2,857,142,857.14 S- 1 2 3 4 5 6
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