• Contains:

1. Tangible Benefits Worksheet
2. One Time Cost Worksheet
3. Recurring Cost Worksheet
4. Discount rates

• Used to create Cost/Benefit Analysis Spreadsheets for possible alternative solutions. Cost/Benefit Analysis spreadsheet is located in Files.

• Description of Alternative C Nova Corporation.

1. Industry Leader in CRM solutions
2. Large and complex
3. Pricing only based on modules purchased
4. License for the use of the system is middle of the row

1. Tangible Benefits Worksheet - Nova

Nova - Alternative C Tangible Benefits Worksheet
A.	Cost reduction or avoidance	$12,500
B.	Error reduction	$ 3,500
C.	Increased Flexibility	$ 5,500
D.	Increased speed of activity	$ 7,500
E.	Improvement management/planning control	$15,000
F.	Ease of interfacing with business partners	$16,000
Total Tangible Benefits		$60,000

2. One Time Cost Worksheet Nova

Nova - Alternative C One Time Costs Worksheet
A.	Development Costs	$ 2,000
B.	New Hardware	$ 1,000
C.	Software License or Purchase cost	$19,500
D.	User Training	$ 3,500
E.	Site Preparation	$ 4,000
Total One Time Costs		$30,000

3. Recurring Cost Worksheet Nova

Nova Alternative C Recurring Cost Costs Worksheet
A.	Software Maintenance	$ 2,500
B.	Incremental Data Storage	$ 2,500
C.	Communications	$ 9,000
D.	Supplies	$ 7,000
E.	Other	$ 4,000
Total Recurring Costs		$25,000

4. Discount Rate = 12%

Need to let Management Team know what:

1. What the Overall NPV is.
2. What the Return on Investment is.
3. What the Break Even Point is.

Also discuss in the Baseline Project Plan Report.

Net Economic Benefit YEAR O YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL $0 $0 $0 $0 $0 $0 0 1 1.00000 1 1 1 1 1 $0 $0 $0 $0 $0 $0 Must be given: 1. Net economic benefit from tangible benefit worksheet goes in row 7 cell C7 2. Discount rate: : Row 8 Cell A8 as a fraction; i.e., 12% would be entered as. 12 3. One time cost, which will be placed in row 13, cell B13; make sure to enter the cost as a negative 4. Recurring costs place in row 15-cell C15, and make sure to enter the cost as a negative. PV of Benefits NPV of all Benefits $0 $0 $0 $0 $0 $0 $0 One-Time Costs $0 Recurring Costs Discount Rate PV of Recurring Costs $0 1 $0 $0 1 $0 $0 1 $0 $0 1 $0 $0 1 $0 $0 1 $0 NPV of all Costs $0 $0 $0 $0 $0 $0 $0 Overall NPV $0 Overall ROI #DIV/0! Calculating the Break Even Point Break-even Analysis 1. Find the last year row 30 is negative; go up the column to the year listed in row 6. Write down that result as the whole year. Then do Steps 2 and 3 below to calculate fraction to add to the whole year value. 0 Yearly NPV Cash Flow Overall NPV Cash Flow $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 2. First year row 30 is positive, take row 29, and subract row 30 in same column, and then divide the Net Economic Benefit YEAR O YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL $0 $0 $0 $0 $0 $0 0 1 1.00000 1 1 1 1 1 $0 $0 $0 $0 $0 $0 Must be given: 1. Net economic benefit from tangible benefit worksheet goes in row 7 cell C7 2. Discount rate: : Row 8 Cell A8 as a fraction; i.e., 12% would be entered as. 12 3. One time cost, which will be placed in row 13, cell B13; make sure to enter the cost as a negative 4. Recurring costs place in row 15-cell C15, and make sure to enter the cost as a negative. PV of Benefits NPV of all Benefits $0 $0 $0 $0 $0 $0 $0 One-Time Costs $0 Recurring Costs Discount Rate PV of Recurring Costs $0 1 $0 $0 1 $0 $0 1 $0 $0 1 $0 $0 1 $0 $0 1 $0 NPV of all Costs $0 $0 $0 $0 $0 $0 $0 Overall NPV $0 Overall ROI #DIV/0! Calculating the Break Even Point Break-even Analysis 1. Find the last year row 30 is negative; go up the column to the year listed in row 6. Write down that result as the whole year. Then do Steps 2 and 3 below to calculate fraction to add to the whole year value. 0 Yearly NPV Cash Flow Overall NPV Cash Flow $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 2. First year row 30 is positive, take row 29, and subract row 30 in same column, and then divide the