Gp_03_Sn_06_spreadsheet (NPV, ROI, Payback)

Gp_03_Sn_06_spreadsheet (NPV, ROI, Payback) - Benefits...

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Cost-Benefit Analysis for TIMS YEAR 0 1 2 3 DEVELOPMENT COSTS Training Centre Hardware/Software $70,000 $- $- $- Salaries $75,000 $- $- $- Other $7,500 $- $- $- Total $152,500 $- $- $- Additional costs $31,107 $- $- $- OPERATIONAL COSTS Administration $13,000 $14,300 $15,730 Training Salaries $80,000 $120,000 $160,000 Technical support $35,000 $28,000 $28,000 Facilities $50,000 $55,000 $60,500 Supplies $8,640 $14,400 $21,600 Depreciation (hardware/software) $- $- $- Total Annual Operational costs $186,640 $231,700 $285,830 TOTAL COSTS $336,107 $186,640 $231,700 $285,830 Projected Revenue $- $201,600 $384,000 $612,000
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CALCULATION OF REVENUE ESTIMATES Year 1 8 6 $350 $201,600 Year 2 10 8 $400 $384,000 Year 3 12 10 $425 $612,000 Current Activity levels: Average of 5 classes/month, 6 students each @ $325 per student. Classes per month Students per class Tuition per student Projected Revenue
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Payback Period Year Costs Cumulative Benefits Cumulative Costs
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Unformatted text preview: Benefits $336,107 $336,107 $- $- 1 $186,640 $522,747 $201,600 $201,600 2 $231,700 $754,447 $384,000 $585,600 3 $285,830 $1,040,277 $612,000 $1,197,600 Payback period is : Two years and ? 1197600-1040277=157323 157323/612000=74.2936% 74.2936%*365 days = 2.74 years Return on Investment (ROI) Year Costs Cumulative Benefits Cumulative Costs Benefits $336,107 $336,107 $- $- 1 $186,640 $522,747 $201,600 $201,600 2 $231,700 $754,447 $384,000 $585,600 3 $285,830 $1,040,277 $612,000 $1,197,600 1,040,277 1,197,600 ROI: 15.1% Net Present Value (NPV) Year Year Year Year Total 1 2 3 Benefits $- $201,600 $384,000 $612,000 Factor 1.000 0.909 0.826 0.751 PV of Benefits $- $183,273 $317,355 $459,805 $960,433 Costs $336,107 $186,640 $231,700 $285,830 Factor 1.000 0.909 0.826 0.751 PV of Costs $336,107 $169,673 $191,488 $214,748 $912,015 Net Present Value: $48,417...
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This note was uploaded on 08/02/2011 for the course IT 5460 taught by Professor Prof during the Spring '11 term at Kaplan University.

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Gp_03_Sn_06_spreadsheet (NPV, ROI, Payback) - Benefits...

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