Below are the requirements for this CLC. The fictitious company is called NetVideo. The two competing vendors are Google and Amazon

Here is the Net Present Value formula that was used. Edit as needed:

Discount Rate	8.0%
Year	1	2	3	4	5
Discount Factor	0.93	0.86	0.79	0.74	0.68
Undiscounted Cash Flow	1,000,000,000	1,000,000,000	1,000,000,000	1,000,000,000	1,000,000,000
Present Value	925,925,926	857,338,820	793,832,241	735,029,853	680,583,197
Net Present Value	3,992,710,037
Discounted Value	74,074,074	142,661,180	206,167,759	264,970,147	319,416,803

EXPECTED SAVINGS ARE 1 BILLION

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This is a Collaborative Learning Community (CLC) assignment.

The purpose of this assignment is to gain a better understanding of capital budgeting and discounted cash flow models.

Select one out of two possible IT-based problems for a fictitious company:

Assessment of the costs of a major transition to cloud computing and security upgrades.

CLC groups will work on one problem. The final assignment will include both a narrative part in a Word document and Excel spreadsheet with the analysis of the proposals from the two vendors.

Your project should include the following items:

• A description of a problem within the organization
• A suggested solution to that problem.
• Identification of two companies that could serve as potential vendors for the proposed solutions.
• Total expected real-world costs of the group's proposed solution as models cash outflows.
• Savings are expected as a result of implementing the group's proposed solutions as future cash inflows.
• Use a required rate of return (hurdle rate) of 8% for the discounting of the future cash flows.
• An Excel spreadsheet that analyzes the proposals from two vendors using the net present value (NPV) discounted cash flow model.
• Use Excel's =NPV( ) -costs function to determine which proposal is more financially acceptable. The final part of your assignment will include your justification of why your group's analysis using the NPV method suggests selecting one proposal over the other.
• A minimum of three potential objections the members of the senior management team might raise when the group presents its
• proposal during the company's budget meetings, as well as a defense of your position in light of the objections.

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HERE IS THE NARRATIVE:

NETVIDEO offers digital entertainment services to its online customers across the globe. The company was established a decade ago to provide online entertainment services such as movies and songs to customers in the United States at a fee. NETVIDEO grew over the years and has expanded its operations beyond the United States. Currently, it offers its services to customers in all the world's continents. The company offers its services in two packages. The first package consists of songs and movies watched on its online platforms. The second package includes giving customers the privilege to download music and movies to watch them from the new storage. The expansion of the company's operations to serve customers from all over the world has led to increased revenues.

However, the company also faces challenges as a result of its growth. For instance, NETVIDEO has been storing its data in physical servers, which have become overstretched due to its limited storage space and the exponential growth of data stored over the years. The storage space limitations of the servers currently being used by the company have adversely affected its operations, such as causing delays in processing customer requests when traffic is high. The problem can be addressed by transitioning data storage from physical servers to cloud storage and computing. Another challenge is that the company has faced several hacking cases. However, the management became concerned about the security of its system this year because it has been hacked three times, although the IT team was able to regain control from the hackers. As a result, the company is considering implementing a new security upgrade to overcome the current cybercrime threats. The five-year loss estimate associated with the security threats and storage limitations of its physical servers amounts to $1 billion. The

management has identified Google and Amazon as the two most credible vendors for cloud storage and computing and security upgrade services.

The total cost of cloud storage and computing and the security upgrade will be the main consideration in selecting the vendor between Google and Amazon. Each vendor offers different packages for cloud storage services. For instance, Amazon cloud packages include S3 standard and S3 Intelligent (Amazon, 2022). The S3 standard package costs are $0.023 per GB for the first 50 TB per month, $0.022 per GB for the next 450 TB per month, and $0.021 per GB for space above 500 TB per month (Amazon, 2022). On the other hand, Google cloud storage packages include standard, Nearline, coldline, and archive storage (Google, 2022). The cost of Google cloud storage is $0.020 per GB per month for the standard package. Google cloud computing charges for the standard package are $0.05 for class A operations and $0.004 for class B operations (Google, 2022). Silver Creative Company's storage requirements stand at 1 million TB and will increase by 0.5 million TB annually for the next five years.

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