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Using the following data, calculate the Net Present Value and ROI Project Benefit Expectations Benefits Year o Year 1 Year 2 Year 3 Greater margin
Using the following data, calculate the Net Present Value and ROI
Project Benefit Expectations Benefits Year o Year 1 Year 2 Year 3 Greater margin driven by higher production capacity $500,000 $1,500,000 $1,950,000 Improved logistics: Reduced AR receivable time 125,000 155,000 175,000 Improved Inventory Tracking 500,000 590,000 570,000 Fewer accidents, resulting in less workers' compensation 100,000 140,000 130,000 Improved quality benefits: Fewer defects, resulting in fewer warrenty cost 250,000 350,000 350,000 Fewer customer returns, resulting in less reprocessing costs 50,000 79,000 79,000 50,000 79,000 79,000 $0 Reduced time spent handling customer complaints Costs Initial investment Implementation costs Ongoing support costs Training costs Other costs $1,300,000 440,000 0 $0 0 0 $0 0 100,000 35,000 0 60,000 100,000 25,000 0 100,000 35,000 0 0 YEAR 1 $500,000 2 $1,000,000 3 $1,250,000 125,000 500,000 100,000 125,000 500,000 100,000 125,000 500,000 100,000 250,000 50,000 50,000 300,000 75,000 75,000 300,000 75,000 75,000Step by Step Solution
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