Question
Given the following information for a five-year cost/benefit analysis for a customer support system development, calculate the net present values (fill in the cells
Given the following information for a five-year cost/benefit analysis for a customer support system development, calculate the net present values (fill in the cells in rows #4-6) and then determine the break-even point (#7). Assume that the rate of return is 6%. # 1 2 3 4 10 5 16 7 Category Value of benefits Development costs Annual expenses Net benefit/costs Net Present Value Cumulative NPV Calculate Year 0 0 -$1,581,000 0 -$1,581,000 Year 1 $1,046,000 0 -321,000 725,000 Year 2 $1,074,000 0 -321,000 753,000 Year 3 $1,104,240 0 -321,000 783,240 Year 4 $1,136,899 0 -321,000 815,899 Year 5 $1,172,171 0 -321,000 851,171
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Management Accounting Information for Decision-Making and Strategy Execution
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