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Please answer parts 1-4 Problem 2 Assume that the monetary benefits of an information system are $40,000 at the beginning of the project and increasing
Please answer parts 1-4
Problem 2 Assume that the monetary benefits of an information system are $40,000 at the beginning of the project and increasing benefits of $10,000 a year for the next five years (year 1 = $50,000, year 2 = $60,000, 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 (y0, y1, y2, y3, y4, y5) do the following: 1. Calculate the net present value of these costs and benefits 2. Calculate the overall return on investment 3. Complete a break-even analysis (at what point does break-even occur?) 4. Generate a graphical representation of the break-even analysis in case that it occurs at any point from yo to y5 Problem 2 Assume that the monetary benefits of an information system are $40,000 at the beginning of the project and increasing benefits of $10,000 a year for the next five years (year 1 = $50,000, year 2 = $60,000, 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 (y0, y1, y2, y3, y4, y5) do the following: 1. Calculate the net present value of these costs and benefits 2. Calculate the overall return on investment 3. Complete a break-even analysis (at what point does break-even occur?) 4. Generate a graphical representation of the break-even analysis in case that it occurs at any point from yo to y5Step by Step Solution
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