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Management It

Decent Essays

ENTR 3160
Summer 2015

Assignment 1:
Assessing Economic Feasibility
Instructions
In this assignment, you will create an Excel workbook to help you assess the economic feasibility of a major information systems project. You are provided with two resources:
1. The scenario: The context of the business decision is the replacement of an information system at a large firm. You will find the facts required for your analysis in the scenario.
2. A skeleton Excel file: You are provided with a multi-page Excel workbook with which to build a model for estimating the net present value (NPV) of the information systems project. Submission
This is a group assignment. You should not discuss your answers with other groups.
Assignment 1 …show more content…

Savings from lower inventory levels are expected to be $20,000 per year for each year of the project’s life.
Most of the costs to build the system are development costs: hardware, software, and personnel. Systems Analysts
Programmer Analysts
GUI Designer
Telecommunications Specialist
System Architect
Database Specialist
System Librarian
Development Training
Hardware
Software

$
$
$
$
$
$
$
$
$
$

40,000
35,000
8,000
2,500
5,000
675
3,750
14,000
18,700
15,650

Janine expects the system will take one full year to implement before any benefits are shown.
Once the system achieves operational status, there will be ongoing costs for software licenses, maintenance, and upgrades to system functionality, as noted below. These are the projected operational costs in the first year of operations; they are expected to grow at a rate of 2.5% per year thereafter.
Labour: Programmer Analysts
Labour: System Librarian
Hardware Maintenance
Software Maintenance
Preprinted Forms

$
$
$
$
$

2

8,750
300
995
525
3,300

Requirements
Since the economic model for this project is based on many assumptions, it is important that other users be able to perform their own “what-if” analysis using your Excel file. As a consequence, design features such as a well-structured workbook and an “auditable” model are critical. 1. Your Excel workbook must contain four pages: model, assumptions, and a chart showing the breakeven

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