Essentials of Systems Analysis and Design, 3
rd
Ed. (by Valacich, George & Hoffer)
Ch 3: Pine Valley Furniture Case Exercises Solutions
A .
How were Pine Valley Furniture’s projects initiated?
What is the focus for each of the new
systems?
Jackie Judson, PVF’s vice-president of Marketing, submitted a Systems Service Request, requesting the
development of a Customer Tracking System.
The Customer Tracking System’s focus is primarily
tactical.
PVF’s board of directors initiated the WebStore project.
The WebStore has more of a strategic
focus.
b. Modify the Customer Tracking System’s economic feasibility analysis to reflect the modifications
mentioned in the case scenario.
Use a discount rate of 10 percent. After the changes are made,
what are the new overall NPV, ROI, and BEP?
A suggested answer is provided below.
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Totals
Net Economic
Benefit
$0
$50,000
$55,000
$55,000
$60,000
$60,000
Discount Rate (.10)
0.10
1.0000
0.909091
0.826446
0.751315
0.683013
0.620921
PV of Benefits
$0
$45,455
$45,455
$41,322
$40,981
$37,255
NPV of all Benefits
$0
$45,455
$90,909
$132,231
$173,212
$210,467
$210,467
One-Time Costs
$47,500
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- Spring '09
- MrSmith
- Net Present Value, overall npv, NPV Cash Flow, PV of Benefits NPV
-
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