cost analysis project 2

/in /by

  • Complete the Cost Analysis Project #2 under Exercises at the end of Chapter 7 of the text.
  • Use the spreadsheet method depicted in Part C of the Systems Analyst’s Toolkit to display the Net Present Value of the system
  • Toolkit C
  • Write a response of approximately 250 words summarizing how you derived at your answer.

Turn to Part C of the Systems Analyst’s Toolkit and review the concept of net present

value (NPV). Determine the NPV for the following: An information system will

cost $95,000 to implement over a one-year period and will produce no savings during

that year. When the system goes online, the company will save $30,000 during

the first year of operation. For the next four years, the savings will be $20,000 per

year. Assuming a 12% discount rate, what is the NPV of the system?