Solution-Calculate return on investment of the project

Calculate return on investment of the project

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Reference no: EM132804439

Assume tangible benefits of an information system at $38,000 in the first year and increasing benefits in each subsequent year (i.e., $45,000 in the year 2, $56,000 in the year 3, $65,000 in the year 4, $74,000 in the year 5). One-time development costs were $65,410 and ongoing costs of $14,200 beginning in year 1 gradually increasing in the subsequent four years as follows: $19,300 in the year 2, $30,100 in the year 3, $38,500 in the year 4, and $47,400 in the year 5. The discount rate for the company is 10 per cent. Using a five-year horizon, calculate the NPV of these costs and benefits. Also calculate return on investment of the project and present a break-even analysis. At what point does breakeven occur?

Reference no: EM132804439

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Calculate return on investment of the project

Reference no: EM132804439

Reference no: EM132804439

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