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Ess of Sys Anls- Case Sol- CH 03

Ess of Sys Anls- Case Sol- CH 03 - Essentials of Systems...

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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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