Question: Add the data in the excel sheet after doing the analysis.

The following gives the financial information related to the development of the new system: According to the industry averages, the annual volume of a gym is $1.4 million and the annual operating cost is $0.5 million (John assumes that these figures also apply to BG). It is anticipated that, after implementing the new system, annual sales will increase by 8.5%, and at the same time, annual operating cost will decrease by 5%. 1 The annual discount rate is estimated to be 4.5%. John has estimated that the labour cost of all the development staff members is $0.22 million. As the project manager, you need to estimate the following two additional costs for calculating the total project cost at the time when the system is released for production use: (i) hardware purchasing cost, and (ii) expenses for user training (assuming that user training will be offered only once before system cutover). The life span of the new system is estimated to be 5 years, and the annual system maintenance cost is $7,000. It is assumed that the project will finish at the end of Year 0 and the new system will start to operate in the beginning of Year 1. John has the following three requirements that must be met, otherwise she will not approve the project: (a) The maximum budget for developing the new system (not including the annual system maintenance costs for subsequent years after implementation) that BG can afford is $0.38 million. (b) The break-even period (or payback period) must not be longer than 3 years after system cutover. (c) The total Net Present Value (NPV) for the project must not be less than $0.2 million.