Calculate a benefit-to-cost ratio

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Reference no: EM131435803

Project Selection Journal Guidelines

You are a project manager for a local company that is considering installing a new content management system. Your boss has asked you to do a net present value (NPV) analysis, calculate a benefit-to-cost ratio, and tell him what the payback period will be for this investment. After careful analysis, you have developed the table below. It outlines the benefits and investment costs for the next 5 years. Assuming your company's cost of capital is 10 percent, you are to determine:

1. The net present value of the project

2. The benefit-to-cost ratio

3. The payback period

Years

Benefits

Investment Costs

0

0

$10,000

1

$10,000

$20,000

2

$30,000

$20,000

3

$60,000

$50,000

4

$100,000

$50,000

5

$100,000

$50,000

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In this assignment based on the given values we have to calculate the Net Present value, Benefit-to-cost ratio and the payback period. In the case study the investment and benefit values are given is for 5 years and the only assumption that we did is that capital is of 10%.

Reference no: EM131435803

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len1435803

3/22/2017 12:41:46 AM

Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Project Selection - Entry clearly describes the project selection with specific relevant examples. Calculations - Effectively works with numerical data and solves quantitative problems with accurate calculations. Synthesis - Entry shows excellent evidence of synthesis of the module content and exhibits careful consideration of the topic. Writing - Entry is free of errors in organization and grammar.

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