PVFCase 4-33.docx - PVF Case 4-33 a Pine Valley Furnitures...

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PVF Case 4-33 a. Pine Valley Furniture’s projects were initiated when the System Service Request was submitted by the vice president of Marketing, Jackie Judson. The focus for the first of the new systems, the customer tracking system, is to enable the PVF marketing group to track customer purchase activity and sales trends better. This project is primarily tactical. The focus of the second new system, the WebStore project, is to help move the company into the twenty-first century by facilitating online furniture purchases, with an initial focus on corporate furniture buying. This project is primarily strategic. b. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total Net economic benefit $0 $50,000 $50,000 $50,000 $50,000 $50,000 Discount Rate (10%) 1 0.909 0.8264 0.7513 0.683 0.6209 PV of benefit $0 $45,450 $41,320 $37,565 $34,150 $31,045 NPV of all benefits $0 $45,450 $86,700 $124,335 $158,485 $189,530 $189,530 One-time costs $47,500 Recurring Costs $0 $32,000 $32,000 $32,000 $32,000 $32,000 Discount rate (10%) 1 0.909 0.8264 0.7513 0.683 0.6209 PV of Recurring Costs $0 $29,088.00 $26,444.80 $24,041.60 $21,856.00 $19,868.80 NPV of all Costs $47,500 $76,588.00 $103,032.80 $127,074.40 $148,930.40 $168,799.20 $168,799.20 Overall NPV = $20,731 Overall ROI = 0.12 Project break even point is between years four and five at the discount rate of 10%. It will occur at 4.2 years.
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  • Summer '14
  • Awad
  • Marketing, Net Present Value, Vice President of the United States, Wayne State University, overall npv, art van, Wayne Ism5820 Homeworkhelp Wsu, Ism5820, Pvf Case, Pvf Case 4-33

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