Question
Turn to Part C of the Systems Analysts Toolkit and review the concept of net present value (NPV). Determine the NPV for the following: An
Turn to Part C of the Systems Analysts Toolkit and review the concept of net present value (NPV). Determine the NPV for the following: An information system will cost $185,000 to implement over a one-year period and will produce no savings during that year. When the system goes online, the company will save $38,000 during the first year of operation. For the next four years, the savings will be $21,000, $23,500, $19,800, and $24,500, respectively per year. Assuming a 6.75% discount rate, what is the NPV of the system? Explain whether or not this a good investment.
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