Calculate Net Present Value

$($

NPV

$)$

$$and Return on Investment

$($

ROI

$)$

$.$

Assume your discount percentage is

$6$

$\%$

$.$

$$All calculations should use discounted

values.

Project Priority involves the creation of medical software specific for the

emergency department. The initial investment is $

$2$

$0$

$0$

$,$

$0$

$0$

$0$

$$and you believe the

software install will be complete in two years. The first year's investment is

$

$1$

$5$

$0$

$,$

$0$

$0$

$0$

$$and the second through fifth year's investment is estimated at

$

$1$

$2$

$0$

$,$

$0$

$0$

$0$

$.$

$$Once the software is installed, you expect to yield savings of

$

$2$

$5$

$0$

$,$

$0$

$0$

$0$

$$per year for the following

$4$

$$years$.$ The operational costs of the

software are $

$3$

$0$

$,$

$0$

$0$

$0$

$$per year. Which includes backups and a software

programmer part time assigned to fix implementation problems.

Input only the whole number rounded to the hundredths if a percentage or

amount with $ or

$\%$

$$included if needed.

$($

ex

$.$

$9$

$$or $

$9$

$9$

$9$

$,$

$9$

$9$

$9$

$,$

$9$

$9$

$9$

$.$

$9$

$9$

$$or

$9$

$.$

$9$

$9$

$\%$

$)$

a

$)$

$$What is the expected span of the project in years?

useful life

$)$

b

$)$

$$What is the Net Present Value for this project?

$($

Use this

format: $

$9$

$9$

$9$

$,$

$9$

$9$

$9$

$,$

$9$

$9$

$9$

$.$

$9$

$9$

c

$)$

$$Calculating the numbers at the end of the year, what is the Payback Year for

this project:

d

$)$

$$What is the Return on Investment for the project?

$($

Use

this format:

$9$

$9$

$.$

$9$

$9$

$\%$

e

$)$

$$What is the Return on Investment at the end of the

$5$

th year?

$($

Use this format:

$9$

$9$

$.$

$9$

$9$

$\%$

$)$

f

$)$

$$What is the discount factor for the

$3$

rd year of the project?

$($

Use this format:

$9$

$.$

$9$

$9$

$)$

g

$)$

$$If the company has a minimum "required rate of return" in projects of

$1$

$8$

$\%$

$,$

$$in

your opinion, would you ask your company to invest in this project?

$($

Yes

$/$

No

$)$