Assume monetary benefits of an IT project of $50,000 the first year (year 1) and increasing benefits of $10,000 a year for the next five years (year 2 = $60,000, year 3 = $70,000, year 4 = $80,000, year 5 = $90,000, year 6 = $100,000). One-time development costs were $70,000 in year 1 and recurring costs were $45,000 each year from year 2 to year 6. The discount rate for the company was 11 percent.

Please note that the first year here is called year 1, not year 0.

1) Using a six-year time horizon, calculate the net present value of these costs and benefits.

2) Also calculate the overall return on investment and then present a break-even analysis. At what point does break-even occur? Calculate the break-even point using a formula and then verify it using Excel chart. In other words, you need to conduct break-even analysis using both methods.