• SAP plans to develop a new enterprise resource planning (ERP) software with the following financial implications:
  • Development Costs: $1.2 billion
  • Estimated Annual Revenue: $600 million
  • Operating Costs: $300 million annually
  • Depreciation Expense: $100 million annually
  • Tax Rate: 19%

• Requirements:
  1. Calculate the annual net income from the ERP software.
  2. Prepare a five-year financial projection.
  3. Analyze the impact on SAP’s operating profit margin.
  4. Discuss the strategic benefits of the new ERP software.
  5. Evaluate the potential market risks and competition.