Break-Even Analysis

A University purchased a student management system software in 2022. The system is expected to bring in $450,000 of annual benefits for the University. Calculate the present value of benefits brought in by the system at a discount rate of 0.85%, using a 5-year horizon.

The University acquired the system for $400,000 and expects to spend $20000 in annual maintenance of the system. Using the same time horizon and discount rate, calculate the present value of all costs.

Conduct a break-even analysis