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QUESTION 1 [10 Marks] 1. Assuming monetary benefits of an information system project at $175,000 per year, one-time costs of $250,000, recurring costs of $80,000
QUESTION 1 [10 Marks] 1. Assuming monetary benefits of an information system project at $175,000 per year, one-time costs of $250,000, recurring costs of $80,000 per year, a discount rate of 12 percent, and a five-year time horizon, what is the: Overall NPV? Overall ROI? Show the complete workings using the table template provided below. Please round up your answer into zero decimal place. Answer: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total Net Economic Benefit PV of Benefits NPV of all Benefits One-Time Costs Recurring Costs PV of Recurring Costs NPV of all Costs Overall NPV (NPV of Benefit - NPV of Costs) Overall ROI (Overall NPV / NPV of all Costs)
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