Question
Assume your discount percentage is 7%. All calculations should use discounted values. Project Athena involves the creation of medical software specific for the emergency department.
Assume your discount percentage is 7%. All calculations should use discounted values. Project Athena involves the creation of medical software specific for the emergency department. The initial investment is $500,000 and you believe the software will be done in two years. The first year's investment is $250,000 and the second year's investment is estimated at $300,000. Once the software is installed, you expect to yield savings of $350,000 per year for the following 5 years. The operational costs of the software are $7,000 per year. Which includes backups and a software programmer part-time assigned to fix implementation problems.
a) What is the Return on Investment at the end of the 3rd year? (Use this format: 99.99%)
b) What is the discount factor for the last year of the project? (Use this format: 9.99)
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