Case Study - wk3

Case Study - wk3 - (16261) (2738) 9556 20732--Break Even 3-4

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Case Study a. The projects were initiated by the supervisor, Jim Woo, during a meeting. The focus is to be about corporate furniture buying. b. 10% Years 0 1 2 3 4 5 TOTALS Net Benefit $0 $50000 $50000 $50000 $50000 $50000 -- Discount 10% 1.0000 .9091 .8264 .7513 .6830 .6209 -- PV Benefits $0 $45455 $41320 $37565 $34150 $31045 -- NPV Benefits $0 $45455 $86775 $124340 $158490 $189535 $189535 OneTime Cost $47500 -- -- -- -- -- -- Recurring Cost $0 $32000 $32000 $32000 $32000 $32000 -- Discount 10% 1.0000 .9091 .8264 .7513 .6830 .6209 -- PV Cost $47500 $29091 $26445 $24042 $21856 $19869 -- NPV Cost $47500 $76591 $103036 $127078 $148934 $168803 $168803 Overall NPV -- -- -- -- -- -- $20732 Overall ROI .123 -- -- -- -- -- -- Analysis -- -- -- -- -- -- -- Yearly NPV (47500) 16364 14875 13523 12294 11176 -- Overall NPV (47500) (31136)
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Unformatted text preview: (16261) (2738) 9556 20732--Break Even 3-4 years------------Actual Break Even 3.22 years------------c. After plugging the new discounted values the break- even point actually rose higher and the overall ROI decreased. The overall NPV was decreased as well. d. Office Max: This online store does not only specialize in furniture but also in office supplies. Its a more broad online store that can keep customers satisfied for more than just office furniture. Office Furniture: This online store is more just the furniture. It may not have the benefit of supplies for office use but has a more open selection of furniture....
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This note was uploaded on 07/15/2011 for the course MGMT 340 taught by Professor New during the Spring '11 term at DeVry Chicago.

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Case Study - wk3 - (16261) (2738) 9556 20732--Break Even 3-4

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