The company

ACME Real Estate (ARE) provides real estate services including property sales, leasing, and management; corporate services, facilities, and project management; mortgage banking; investment management and capital markets; appraisal and valuation; and research and consulting. Headquartered in Denver, ARE has nearly 1,000 employees in more than 25 offices in the western US and 2 other countries. The company reported net revenues of $500 million in 2016.

Case Questions

Calculate the following:

A.) Annual ROI

B.) Total Cost of ownership

C.) Average annual cost of ownership

D.) Net present value in year 3

E.) Payback period

The Numbers Scenario 1 Annual Benefits Direct Indirect Total Benefits per period Initial Yr1 Yr2 Yr3 26,000 2,279,729 2,305,729 26,000 2,279,729 2,305,729 26,000 2,279,729 2,305,729 Depreciation Schedule Software Hardware Total Depreciation per period Acquisition Yr1 Yr2 Yr3 200,000 24,000 224,000 40,000 5,000 45,000 40,000 5,000 45,000 40,000 5,000 45,000 Yr1 Yr3 Expensed Costs Software Hardware Consulting Personnel Training Other Total Costs per period Initial Yr2 30,000 5,000 30,000 5,000 30,000 5,000 45,000 64,000 20,981 100,000 100,000 100,000 129,981 135,000 135,000 135,000 Assumptions: 15% discount rate