Question
Cheapos is a new company that sells very cheap plastic products. Their product portfolio includes housewares, tools, toys, decorations, and office accessories. The company's mission
Cheapos is a new company that sells very cheap plastic products. Their product portfolio includes housewares, tools, toys, decorations, and office accessories. The company's mission is to draw in customers from dollar stores (e.g., Dollar Store, Dollar Tree, etc.) and FiveBelow to their site and delivery services. Customers who order online will have their ridiculously cheap products delivered to any location they choose. Cheapos wants to fully integrate with Amazon, Etsy, and Zulily platforms in order to market their cheap products. They have selected a software package that is self-managed, allowing the company to promote their products on those platforms. Note: You are allowed to adjust this use case by adding more detail to make your proposal more insightful. However, you must keep the basic use case details outlined above intact. Cash Outflows: Software Licensing: $87,000 over 3 years, starting in year 1 Cloud Hosting: $1,250 monthly, starting year 0 Software Maintenance/Support: $5,000 annually, starting year 1 Implementation Costs: $75,000 year 0 only Cash Inflows: Increased Revenue: $13,500 annually, starting in year 1 $19,500 annually, starting year 4 Reduces Labor Expense: $5,000 annually, starting in year 1 Reduced Infrastructure Expense: $18,500 year 0 only Note: Assume a year is defined as January - December. Unless otherwise stated in the use case, calculate the inflows and outflows for the entire year or for a specific grouping of years (e.g., years 1-3 and years 4-5). Methods: Net Present Value (NPV) Internal Rate Of Return (IRR)
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