Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at$400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) Financial Analysis for Project Name Created by: Date: Note: Change the inputs, shown in green below (i.e. interest rate, number of years, costs, and benefits). Be sure to double-check the formulas based on the inputs.
Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at$400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) Financial Analysis for Project Name Created by: Date: Note: Change the inputs, shown in green below (i.e. interest rate, number of years, costs, and benefits). Be sure to double-check the formulas based on the inputs.
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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Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at$400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the
| Financial Analysis for Project Name | |||||||
| Created by: | Date: | ||||||
| Note: Change the inputs, shown in green below (i.e. interest rate, number of years, costs, and benefits). Be sure to double-check the formulas based on the inputs. | |||||||
| Discount rate | 8.00% | ||||||
| Assume the project is completed in Year 0 | Year | ||||||
| 0 | 1 | 2 | 3 | Total | |||
| Costs | 140,000 | 40,000 | 40,000 | 40,000 | |||
| Discount factor | 1.00 | 0.93 | 0.86 | 0.79 | |||
| Discounted costs | 140,000 | 37,200 | 34,400 | 31,600 | 243,200 | ||
| Benefits | 0 | 200,000 | 200,000 | 200,000 | |||
| Discount factor | 1.00 | 0.93 | 0.86 | 0.79 | |||
| Discounted benefits | 0 | 186,000 | 172,000 | 158,000 | 516,000 | ||
| Discounted benefits - costs | (140,000) | 148,800 | 137,600 | 126,400 |
|
NPV | |
| Cumulative benefits - costs | (140,000) |
|
146,400 | 272,800 | |||
|
112% | ||||||
| Payback in Year 1 | |||||||
| Assumptions | |||||||
| Enter assumptions here |
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