Cost Benefit of Mountain Bike - Purpose: Cost-Benefit...

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Created by: Vina PhamLast Modified: March 7th, 2017Purpose: Cost-Benefit Anaylsis for Extreme Mountain BikeCosts: Contains the Implementation Costs and Maintenance CostsBenefits: Contains the Recurring BenefitsCost-Benefit Analysis: Contains the Calculation of the Next Present ValueBreak-Even Chart: Contains the Chart Depiciting the Break-Even Point
Implementation CostsDollar AmountSoftware Licenses$500,000Hardware$75,000Network and Communication Costs$25,000Training$25,000Configuration and Implementation$2,750,000Total Implementation Costs$3,375,000Maintenance CostsDollar AmountSoftware Licenses Maintenance Fee$80,000New IT Employees (2 x 90,000)$180,000Total Maintenance Costs$260,000
BenefitsDollar AmountIncreased Profits due to Increased Sales$750,000Reduced Inventory Holding Costs$250,000Reduction in Clerical Workforce (4 x 55,000)$220,000Total Benfits$1,220,000
Discount Ratio0.150123Costs:Implementation Costs$3,375,000$0$0$0Maintanance Costs$0$260,000$260,000$260,000PV Factor1.0000.8700.7560.658PV of Costs$3,375,000.00 $226,086.96 $196,597.35 $170,954.22Benefits:Recurring Benefits$0$620,000$620,000$620,000PV Factor1.0000.8700.7560.658PV of Benfits$0$539,130$468,809$407,660-$3,375,000.00 $313,043.48 $272,211.72 $236,705.84-$1,121,640.67($3,375,000)$360,000 $360,000 $360,000 8.6292%Net Benfit (Cost)Overall Net PV (Net PV over 20 years)Net Benefits (Actual Costs and Benefits)Internal Rate of Return(Breakeven at End of Timeline)
Years4567891011$0$0$0$0$0$0$0$0$260,000$260,000$260,000$260,000$260,000$260,000$260,000$260,0000.5720.4970.4320.3760.3270.2840.2470.215$148,655.84 $129,265.95 $112,405.17$97,743.63$84,994.46$73,908.23$64,268.02$55,885.24$620,000$620,000$620,000$620,000$620,000
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Term
Fall
Professor
Bhattacharjee
Tags
Net Present Value, Benefit cost ratio, Yearly Net PV

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