i need some help with the second photo. not sure if its correct and im stuck after the benefits section
. . . Target Customer Kiosks Target is considering the installation of customer kiosks in their stores. The kiosks will allow customers to search for products, tell them if the products are in stock, and show them on a map where in the store the products are located. Use the following facts to conduct a break even analysis of the customer kiosk technology Costs There will be a one-time cost of $45,000,000 in 2021 to develop and implement the system software. Starting in 2022 there will be an annual software maintenance fee of $16,000 per store in which kiosks are installed to cover bug fixes and upgrades. Target has a total of 3,000 stores with kiosk installation occurring on the following schedule: 500 stores in 2021, 700 stores in 2022, 800 stores in 2023, and the remaining 1,000 stores in 2024 Each store will have 8 customer kiosks installed. Two kiosks will be located at each entrance with the other kiosks located at select spots within the store. There is a one-time cost per kiosk of $32,000 which represents the kiosk's purchase and installation There is an annual hardware maintenance fee of $4,500 to maintain each installed kiosk starting in the year the kiosk is installed. Benefits The tangible benefits come from reduced labor costs and increased sales revenue. The kiosks are expected to reduce the need for employees to spend time directing customers to products. This time savings will result in reduced labor costs equivalent to employing one employee during regular store hours from 8am- Bpm per store where kiosks are installed. Target stores are open 365 days per year. The sales associate labor rate is $10.50 per hour. The kiosks are also expected to increase the likelihood that customers will find all of the items they are looking to purchase. It is estimated that each store with kiosks will sell 130 additional items per day, averaging $1.85 per item. . Calculations The break-even analysis will cover a 6-year period from 2021-2026. For each year: Calculate the system costs and benefits. Calculate the net benefits of the system and the break-even totals for the system. Break even totals are simply the accumulated net benefits. The project breaks even when the accumulated net benefits value is positive. For the total time period: Calculate the net present value (NPV) of the investment using a rate of 15%. Calculate the internal rate of return (IRR). . . F G H 2025 2026 Break Even Analysis for Target Customer Kiosks 2021 2022 2023 SOD 700 BOO 500 1200 2000 2024 1000 3000 Variables Count of new stores installine kiosks Running total of stores with kiosks installed Number of kiosks per store One-time software development and implementation Purchase and installation per kiosk Annual software maintenance per store Annual hardware maintenance per kiosk Employee labor rate per hour Business days per year Regular store hours per day Additional items sold per store with kiosks Average revenue per additional item sold NPV Rate 45.000.000 32000 16000 4500 10.5 365 12 130 185 15% 2022 2023 2024 2025 2026 Costs One-Time software development and implementation Purchase and installation of kiosks Annual software maintenance Annual hardware maintenance Total Annual Costs 2021 45000000 128000000 8000000 18000000 199000000 179200000 19200000 49200000 242600000 204800000 32000000 72000000 SORHO0000 256000000 48000000 108.000000 412000000 4300 1000000 156000000 48000000 10B000000 1560000 2022 2023 2024 2025 2026 Costs One-Time software development and implementation Purchase and installation of kiosks Annual software maintenance Annual hardware maintenance Total Annual Costs 2021 45000000 128000000 8000000 18000000 199000000 179200000 19200000 43200000 241600000 204800000 32000000 72000000 308800000 25600000 48000000 108000000 412000000 480000000 108000000 156000000 400XX00 1000000 156000000 Benefits Reduced labor Increased sales Total Annual Benefits 2021 22995000 43891250 66886250 2022 55188000 105339000 160527000 2023 91980000 175565000 267545000 2024 137970000 253347500 401317500 2025 137970000 263347500 401317500 2026 137970000 263347500 401317500 2021 - 132113750 - 132113750 Break Even, NPV, and IRR Calculations Net Annual Benefits Break-Even Totals (Accumulated Net Benefits Net Present Value (NPV Internal Rate of Return (IRR) 2022 -51073000 -81073000 2023 41255000 2024 -10682500 2025 245312500 2026 245317500 2023 Questions In what year will Target break even on this project? Based on their target Fate of return of 15, should Target go forward with this project? in what year will Target break even if the employee labor Tale per hour is 511 What is the NPV if the annual hardware maintenance feel is increased by 5500? VES 2022 11543823 . . . Target Customer Kiosks Target is considering the installation of customer kiosks in their stores. The kiosks will allow customers to search for products, tell them if the products are in stock, and show them on a map where in the store the products are located. Use the following facts to conduct a break even analysis of the customer kiosk technology Costs There will be a one-time cost of $45,000,000 in 2021 to develop and implement the system software. Starting in 2022 there will be an annual software maintenance fee of $16,000 per store in which kiosks are installed to cover bug fixes and upgrades. Target has a total of 3,000 stores with kiosk installation occurring on the following schedule: 500 stores in 2021, 700 stores in 2022, 800 stores in 2023, and the remaining 1,000 stores in 2024 Each store will have 8 customer kiosks installed. Two kiosks will be located at each entrance with the other kiosks located at select spots within the store. There is a one-time cost per kiosk of $32,000 which represents the kiosk's purchase and installation There is an annual hardware maintenance fee of $4,500 to maintain each installed kiosk starting in the year the kiosk is installed. Benefits The tangible benefits come from reduced labor costs and increased sales revenue. The kiosks are expected to reduce the need for employees to spend time directing customers to products. This time savings will result in reduced labor costs equivalent to employing one employee during regular store hours from 8am- Bpm per store where kiosks are installed. Target stores are open 365 days per year. The sales associate labor rate is $10.50 per hour. The kiosks are also expected to increase the likelihood that customers will find all of the items they are looking to purchase. It is estimated that each store with kiosks will sell 130 additional items per day, averaging $1.85 per item. . Calculations The break-even analysis will cover a 6-year period from 2021-2026. For each year: Calculate the system costs and benefits. Calculate the net benefits of the system and the break-even totals for the system. Break even totals are simply the accumulated net benefits. The project breaks even when the accumulated net benefits value is positive. For the total time period: Calculate the net present value (NPV) of the investment using a rate of 15%. Calculate the internal rate of return (IRR). . . F G H 2025 2026 Break Even Analysis for Target Customer Kiosks 2021 2022 2023 SOD 700 BOO 500 1200 2000 2024 1000 3000 Variables Count of new stores installine kiosks Running total of stores with kiosks installed Number of kiosks per store One-time software development and implementation Purchase and installation per kiosk Annual software maintenance per store Annual hardware maintenance per kiosk Employee labor rate per hour Business days per year Regular store hours per day Additional items sold per store with kiosks Average revenue per additional item sold NPV Rate 45.000.000 32000 16000 4500 10.5 365 12 130 185 15% 2022 2023 2024 2025 2026 Costs One-Time software development and implementation Purchase and installation of kiosks Annual software maintenance Annual hardware maintenance Total Annual Costs 2021 45000000 128000000 8000000 18000000 199000000 179200000 19200000 49200000 242600000 204800000 32000000 72000000 SORHO0000 256000000 48000000 108.000000 412000000 4300 1000000 156000000 48000000 10B000000 1560000 2022 2023 2024 2025 2026 Costs One-Time software development and implementation Purchase and installation of kiosks Annual software maintenance Annual hardware maintenance Total Annual Costs 2021 45000000 128000000 8000000 18000000 199000000 179200000 19200000 43200000 241600000 204800000 32000000 72000000 308800000 25600000 48000000 108000000 412000000 480000000 108000000 156000000 400XX00 1000000 156000000 Benefits Reduced labor Increased sales Total Annual Benefits 2021 22995000 43891250 66886250 2022 55188000 105339000 160527000 2023 91980000 175565000 267545000 2024 137970000 253347500 401317500 2025 137970000 263347500 401317500 2026 137970000 263347500 401317500 2021 - 132113750 - 132113750 Break Even, NPV, and IRR Calculations Net Annual Benefits Break-Even Totals (Accumulated Net Benefits Net Present Value (NPV Internal Rate of Return (IRR) 2022 -51073000 -81073000 2023 41255000 2024 -10682500 2025 245312500 2026 245317500 2023 Questions In what year will Target break even on this project? Based on their target Fate of return of 15, should Target go forward with this project? in what year will Target break even if the employee labor Tale per hour is 511 What is the NPV if the annual hardware maintenance feel is increased by 5500? VES 2022 11543823
