Cost and Benefit Schedule

Given 2: The Cost of the Existing System

Presented above are the cost and benefit schedule and the cost of the existing system. With the proposed ERP System for BUIAMA Corporation, determine the following:

Assumptions:

1. In the calculation of BEP, Payback Period, NPV, and NPV2, maintenance cost is a separate account.
2. In determining the NPV, the discount rate is 10%.
3. In determining the NPV2, the net benefits discount rate is 12% and net cost discount rate is 12%.

Requirements and Marking Scheme:

1. Break-Even Point
2. Payback Period
3. Cost-Benefit Analysis Using Present Value (for Purchasing Operations Support)
4. Cost-Benefit Analysis Using Present Value (Economic Feasibility Analysis for an ERP System Project)
5. Make an analysis of the results derived for each requirement.

Tangible Benefits YEAR 2 YEAR 1 YEAR 3 YEAR 4 YEAR 5 Category Costreduction or avoidance In ED 7,000.00 5,000.00 6,000.00 8,000.00 9,000.00 Error reducton Increased fexibity Increased speed of acivity 3,500.00 4,000.00 4,50).00 5,000.00 6,000.00 7,500.00 7,600.00 7,70).00 7,800.00 7,900.00 10,000.00 10,100.00 10,200.00 10,300.00 10,400.00 Improvement in management planning and control Other 20,000.00 21,000.00 22,00.00 23,000.00 24,000.00 2,000.00 2,500.00 3,000.00 3,500.00 4,000.00 Total Tangible Benefits 48,000.00 51,200.00 54,400.00 57,600.00 61,300.00 Tangible One-Time Costs Category In ED Development costs 25,000.00 New hardware New sotware Usertraining Ste preparaton Other Total Tangible Ore-Time Costs 15,000.00 10,000.00 2,500.00 500.00 500.00 53,500.00 Tangible Recurring Costs Category In ED Applicaton software maintenance Incremental data storage required Incremental communicatons New sotware or hardware leases Supples Total Tangible Recurring Costs 10,000.00 10,500.00 11,000.00 11,500.00 12,000.00 1,000.00 1,500.00 2,00).00 2,500.00 3,00000 2,000.00 2,250.00 2,50).00 2,750.00 3,00000 1,000.00 1,50).00 2,000.00 2,500.00 500.00 500.00 500.00 500.00 500.00 13,500.00 15,750.00 17,500.00 19,250.00 21,000.00