Prepare a business report for management analyzing the return on the investment for this system over a five-year period using the following capital budgeting models: net present value, return on investment (ROI), internal rate of return (IRR), and payback method. Assume a 5 percent interest rate for your net present value calculations. Use spreadsheet software for your calculations.

Dirt Bikess management would like to analyze the return on its investment in its

employee training and skills tracking system described in Chapter 13. The system runs on

the human resources specialists PCs using PC database software. Because the entire

corporate administrative staff recently received new desktop PC systems with database

and other productivity software, there are no additional hardware and software purchase

costs. The main costs include the initial cost of designing and implementing the database

(business staff cost of $5,000; information systems staff cost of $15,000), gathering and

adding employee skills and training data to the database ($5,500 initial data conversion

cost plus $1,000 annual data entry costs), and ongoing maintenance and support ($3,000

annually). Human resources staff members believe the new application could save each

of them two hours of work per week. (Their annual salaries are $37,000 and $42,000

each.) The company would also save about $11,000 annually in employee recruiting costs

because it would be able to fill many vacant positions with existing employees, thereby

reducing its costs for recruiting outside the company. The system would not be installed

until the end of 2014 and would return benefits from 2015 to 2019.number of hours 40 per week