Calculate the net present value (NPV), the return on investment (ROI) and the payback period using a discount rate of 8 percent for the following systems development project. Anticipated Year Annual Benefits Expected Annual Operating Costs Discount Factors at 8 Percent $55,000 $5,000 9259 2 $60,000 $5,000 .8573 $70,000 $5,500 7938 4 $75,000 $5,500 7349 $80,000 $7,000 .6805 6. $80,000 $7,000 .6301 $80,000 $7,000 .5833 $80,000 $8,000 5401 The initial development costs for the system were $225,000.
Calculate the net present value (NPV), the return on investment (ROI) and the payback period using a discount rate of 8 percent for the following systems development project. Anticipated Year Annual Benefits Expected Annual Operating Costs Discount Factors at 8 Percent $55,000 $5,000 9259 2 $60,000 $5,000 .8573 $70,000 $5,500 7938 4 $75,000 $5,500 7349 $80,000 $7,000 .6805 6. $80,000 $7,000 .6301 $80,000 $7,000 .5833 $80,000 $8,000 5401 The initial development costs for the system were $225,000.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 1BE: Average rate of return Determine the average rate of return for a project that is estimated to yield...
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![Calculate the net present value (NPV), the return on investment (ROI) and the payback period using
a discount rate of 8 percent for the following systems development project.
Year
Anticipated
Annual Benefits
Expected Annual
Operating Costs
Discount Factors
at 8 Percent
1
$55,000
$5,000
.9259
$60,000
$5,000
.8573
3.
$70,000
$5,500
7938
$75,000
$5,500
7349
$80,000
$7,000
6805
6.
$80,000
$7,000
.6301
$80,000
$7,000
5833
8.
$80,000
$8,000
.5401
The initial development costs for the system were $225,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc4902317-acc5-4996-a326-558f69f5dd0a%2Fd21d8fc8-a59a-4d36-ab68-4feffb7a3da1%2F3m8msg9_processed.png&w=3840&q=75)
Transcribed Image Text:Calculate the net present value (NPV), the return on investment (ROI) and the payback period using
a discount rate of 8 percent for the following systems development project.
Year
Anticipated
Annual Benefits
Expected Annual
Operating Costs
Discount Factors
at 8 Percent
1
$55,000
$5,000
.9259
$60,000
$5,000
.8573
3.
$70,000
$5,500
7938
$75,000
$5,500
7349
$80,000
$7,000
6805
6.
$80,000
$7,000
.6301
$80,000
$7,000
5833
8.
$80,000
$8,000
.5401
The initial development costs for the system were $225,000.
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