Question
I need help putting this problem on an excel spreadsheet. I don't know the formulas. Assume monetary benefits of an information system of $40,000 the
I need help putting this problem on an excel spreadsheet. I don't know the formulas.
Assume monetary benefits of an information system of $40,000 the first year and increasing benefits of $10,000 a year for the next five years (year 1=$50,000, year 3=$70,000, year 4=$80,000, year 5=$90,000). One-time development costs were $80,000 and recurring costs were $45,000 over the duration of the system's life. The discount rate for the company was 11 percent. Using a six-year time horizon, calculate the net present value of these costs and benefits. Also, calculate the overall return on investment and then present a break-even analysis. At what point does breakeven occur?
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