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. Expected Annual Operating Costs Year Anticipated Annual Benefits Discount Factors at 8 Percent 1 $5,000 $5,000 .9259 $60,000 $5,000 .8573 3 $70,000 $5,500 .7938 $75,000 $5,500 7349 $80,000 $7,000 .6805 $80,000 $7,000 .6301 7 $80,000 $7,000 5833 8 $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. Expected Annual Operating Costs Year Anticipated Annual Benefits Discount Factors at 8 Percent 1 $5,000 $5,000 .9259 $60,000 $5,000 .8573 3 $70,000 $5,500 .7938 $75,000 $5,500 7349 $80,000 $7,000 .6805 $80,000 $7,000 .6301 7 $80,000 $7,000 5833 8 $80,000 $8,000 .5401 The initial development costs for the system were $225,000.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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.
Anticipated
Annual Benefits
Expected Annual
Operating Costs
Discount Factors
at 8 Percent
Year
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
$80,000
$7,000
.6301
7
$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%2F38c1b0a1-c137-4dc1-b0f9-7f9ce8fa46e0%2Fd2b38dff-0703-465a-a465-89dad0c0d99e%2F1vuaul_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.
Anticipated
Annual Benefits
Expected Annual
Operating Costs
Discount Factors
at 8 Percent
Year
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
$80,000
$7,000
.6301
7
$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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