X Data A Review R AutoSum 12 Fill - 2 Clear Sort & Find & Filter Select Editing Font Cells H | J FL12 MIS-640-RS-CLC-Evaluating-IT-Investments-and-projects - Microsoft Excel Home Insert Page Layout Formulas View || H N M W % Cut Calibri Wrap Text General E Copy Paste BIU Merge & Center $ % 8.09 Cell Conditional Format Insert Delete Format Format Painter Formatting as Table Styles Clipboard Alignment Number Styles A16 X for Response: A B D E F F. G 4. Simple ROI 5 Company XYZ is investing in new technology, resulting in the following costs, savings and revenue: 6 Costs: 7 Equipment 135,000 8 Training 7,000 9 Annual Support 4,000 10 Savings: 11 Personnel 6,000 12 13 Additional revenue 4,500 14 7.2% (savings + income) / cost ROI Do you have enough information to recommend this project? Why or why not? What advantages / 15 disadvantages exist with using ROI? Topic 5 IIII Edit BE 14596 + 99+ 74F Sunny a op 6:11 PM 3/14/2022 32 - Cla MIS-640-RS-CLC-Evaluating-IT-Investments-and-projects - Microsoft Excel Home Insert Formulas Page Layout Data Review X View n! AutoSum 12 General Fill - 2 Clear Sort & Find & Filter Select Editing Font Number Cells A16 H | J * Cut Calibri Wrap Text E Copy Paste a Merge & Center $ % B I U Cell % 8:08 Conditional Format Insert Delete Format Format Painter Formatting as Table Styles Clipboard E Alignment Styles X for Response: A B C D E F F. G You are comparing 2 projects with the following cash flows. Which would you recommend, based upon 19 NPV with a 10% discount rate? 20 21 PROJECT A PROJECT B 22 0 -22500 0 -20000 23 1 6000 1 10000 24 2 6000 2 8000 25 3 6000 3 2000 26 4 6000 4 500 27 5 6000 5 500 28 NPV $ 245 NPV $ (2,143) 29 IRR 10% 3% 30 Payback 3.8 years 3.0 years Which project would you recommend and why? Describe advantages / disadvantages of each of the 31 valuation techiniques in the example. K Topic 5 Edit BO 14596 - + 99+ 74F Sunny a 6:12 PM 3/14/2022 32 - Cla MIS-640-RS-CLC-Evaluating-IT-Investments-and-projects - Microsoft Excel Home Insert Formulas Page Layout Data X Review View AutoSum Calibri 12 Wrap Text General Fill - * Cut E Copy Paste Format Painter Clipboard E B I U a Merge & Center $ % % 8:08 Insert Delete Format Conditional Format Cell Formatting as Table Styles Styles 2 Clear - Sort & Find & Filter Select Editing Font Alignment Number Cells A16 X for Response: B C D E F. G H J A 33 34 Cost / Benefit ABC Co is considering a project that will result in the following costs and potential productiivity 35 improvements: 36 New Volume 30,000 37 Old Volume 35,000 38 Current Staffing Level 20 39 Staff Savings (3) 40 Average Personnel Cost per FTE $ 30,000 41 Interpret the result of a staff savings of 3 and convert to a financial figure. Response: 42 43 Topic 5 * IIII Edit BO 1459 + 99+ 74F Sunny a op 6:13 PM 3/14/2022 32 - Cla MIS-640-RS-CLC-Evaluating-IT-Investments-and-projects - Microsoft Excel Home Insert Formulas Page Layout Data X Review View AutoSum Calibri 12 Wrap Text General Fill - * Cut E Copy Paste Format Painter Clipboard B I U Merge & Center $ % % 8:08 Insert Delete Format Conditional Format Cell Formatting as Table Styles Styles 2 Clear - Sort & Find & Filter Select Editing Font Alignment Number Cells A16 X for Response: B. A D E F. G H | J 43 GOAL Co is considering a new inventory forecasting system that will result in the following costs and 44 inventory savings: 45 System Cost 180,000 46 Inventory Reduction 500,000 47 1% Reduction in Inventory Damage per Quarter 20,000 48 Reduction in Borrowing Costs @ 5% 25,000 49 TOTAL Annual Savings 45,000 50 Payback 4 years 51 Explain the rationalization for the numbers used and approving this investment. Response: 52 53 Topic 5 IIII Edit BO 14596 + 99+ 74F Sunny O a op 6:14 PM 3/14/2022 32 - Cla MIS-640-RS-CLC-Evaluating-IT-Investments-and-projects - Microsoft Excel Home Insert Formulas Page Layout Data X Review View AutoSum Calibri 12 Wrap Text General Fill - * Cut E Copy Paste Format Painter Clipboard B I U a Merge & Center $ % % 8:08 Insert Delete Format Conditional Format Cell Formatting as Table Styles Styles 2 Clear - Sort & Find & Filter Select Editing Font Alignment Number Cells A16 X for Response: A A B C D E F. G H | J 53 The IT team at GOAL Co is developing new systems to improve productivity, with the following expected 54 return on time invested: 55 FTE on Team 20 56 Weeks Required for Change 7 per FTE 57 Total Time Investment 140 58 Work Weeks per Year 44 59 Savings in Future Development Times 10% 60 Return on Time Spent 132 man-weeks 61 How would you explain the result to GOAL Co's management team? Response: 62 63 Topic 5 III. Edit BE 1459 + 99+ 74F Sunny O a op 6:14 PM 3/14/2022 32
