calculate the initial ROI for two years without considering the time value of money.

Calculate the break-even point of sales units in year 1 and year 2

Is it beneficial to proceed with the project or not?

 

Use the information provided below:
1. There are 22 customer service representatives on staff.

2. The tablets will cost $475 per device. The tablets will last for 2 years or more. Annual insurance on the devices will be $25 per device. There will be no price increase on the insurance for Year 2.

3. The new customer service software subscription will cost $55.00 per year per device. There will be no price increase in Year 2.

4. The initial training cost on the new software will be $2,750 for all 22 of the customer service representatives. In Year 2, there will be a refresher course for new representatives, and that course will cost $100 per participant. Dozer estimates that it will have a 50% turnover in its customer service representatives for Year 2.

5. The customer service skills seminar will have the following costs. The flood costs will only be incurred in the first year.

a. Seminar speaker: $2,000.00

b. Books and materials: $975.00

c. Lunch for participants: $15.00 per participant

d. Flood cost per participant: $50.00. Flood will be conducted on all customer service staff in Year 1 and all new staff in Year 2.

6. Doser expects to sell an additional 2,750 of its product in Year 1 because of this program. Dozer has a profit margin of $10 on each unit it sells.

Doser expects to realize an additional 3,750 units of sales in Year 2 with the same profit margin.