Assumptions: 15% discount rate

Calculate the following:

a) Annual ROI (don?t worry about tax consequences)

b) Total Cost of ownership

c) Average annual cost of ownership

d) Net present value in year 3

e) Payback period

Year 1 27,000 Annual Benefits Direct Indirect Total Benefits Per Period Year 2 27,000 Initial Year 3 0 0 27,000 2,279,7292,279,729 2,279,729 2,306,729 2,306,729 2,306,729 Depreciation Schedule Software Hardware Total Per Period Initial 200,000 24,000 224,000 Year 1 40,000 4,800 44800 Year 2 40,000 4,800 44,800 Year 3 40,000 4,800 44,800 Expensed Costs Software Hardware Consulting Personnel Training Other Total Per Period Year 2 30,000 4,800 Initial Year 3 Year 1 30,000 4,800 0 30,000 4,800 45,000 64,000 20,981 0 129,981 100,000 0 100,000 0 0 134,800 100,000 0 134,800