Essentials of Systems Analysis and Design (6th Edition)
Essentials of Systems Analysis and Design (6th Edition)
6th Edition
ISBN: 9780133546231
Author: Joseph Valacich, Joey George
Publisher: PEARSON
Question
Book Icon
Chapter 4, Problem 21PE
Program Plan Intro

Economic feasibility analysis of an information system:

Monetary benefits of an information system = $85,000 per year.

One-time costs = $75,000

Recurring cost = $35,000 per year.

Discount rate = 12%

Time period = 3 years

Explanation of Solution

Overall Return on Investment (ROI):

Overall return on investment can be calculated as:

Overall ROI = (Overall NPV / NPV of all costs)

Overall NPV = (NPV of all benefits – NPV of all costs)                    

Explanation of Solution

Break-Even Analysis (BEA):

  • Break even analysis is carried out by determining NPV of yearly cash flows.
  • The yearly cash flows are calculated by subtracting present values of recurring costs from the present value of yearly benefits.
  • The overall NPV cash flow is total cash flow of the preceding years.
  • After determining NPV yearly cash flows, it is found that break even occurs between year one and two.
  • This is because Overall NPV is non-negative (positive)...

Blurred answer
Students have asked these similar questions
What are the major threats of using the internet? How do you use it? How do children use it? How canwe secure it? Provide four references with your answer. Two of the refernces can be from an article and the other two from websites.
Assume that a string of name & surname is saved in S. The alphabetical characters in S can be in lowercase and/or uppercase letters. Name and surname are assumed to be separated by a space character and the string ends with a full stop "." character. Write an assembly language program that will copy the name to NAME in lowercase and the surname to SNAME in uppercase letters. Assume that name and/or surname cannot exceed 20 characters. The program should be general and work with every possible string with name & surname. However, you can consider the data segment definition given below in your program. .DATA S DB 'Mahmoud Obaid." NAME DB 20 DUP(?) SNAME DB 20 DUP(?) Hint: Uppercase characters are ordered between 'A' (41H) and 'Z' (5AH) and lowercase characters are ordered between 'a' (61H) and 'z' (7AH) in the in the ASCII Code table. For lowercase letters, bit 5 (d5) of the ASCII code is 1 where for uppercase letters it is 0. For example, Letter 'h' Binary ASCII 01101000 68H 'H'…
What did you find most interesting or surprising about the scientist Lavoiser?
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Principles of Information Systems (MindTap Course...
Computer Science
ISBN:9781305971776
Author:Ralph Stair, George Reynolds
Publisher:Cengage Learning
Text book image
Principles of Information Security (MindTap Cours...
Computer Science
ISBN:9781337102063
Author:Michael E. Whitman, Herbert J. Mattord
Publisher:Cengage Learning
Text book image
Information Technology Project Management
Computer Science
ISBN:9781337101356
Author:Kathy Schwalbe
Publisher:Cengage Learning