Assuming monetary benefits of a construction project at $50,000 per year during year 1, 2, 3 and 5 (not year 4), one-time costs (initial investment) of $15,000, recurring costs of $35,000 per year (every year), a discount rate of 10 per cent, and a 5-year time horizon, calculate the net present value (NPV) of an information system's costs and benefits. Calculate the overall return on investment (ROI) of the project. During which year does break-even occur?

Use the NPV template provided (modify to suit your answer) and clearly display the NPV, ROI, and year in which payback occurs.

Write a paragraph explaining whether you would recommend investing in this project based on your nancial analysis. Explain your answer referring to the NPV, ROI and payback for this project.

Discount Rate (10%)

Year 0 - 1.0000

Year 1 - .9091

Year 2 - .8264

Year 3 - .7513

Year 4 - .6830

Year 5 - .6209

Discount Factor	10%
	Year
Year	1	2	3	4	5	Total
Benefits	-
Discount factor	0.909	0.826	0.751	0.683	0.621
PV of Benefits	-	-	-	-		-
Year	1	2	3	4
Costs
Discount factor	0.909	0.826	0.751	0.683	0.621
PV of Costs	-	-	-	-		-
						-	<-------	Overall NPV
Discounted benefits-costs	-	-	-	-		-
Cumulative benefits-costs	-	-	-	-		-
Payback is in which year?
ROI		<--------	benefits-costs/ costs