Can you please help me solve for the Return on Investment and Break-Even Point based on the data that is provided? Also, how do I convert the result of Break-Even Point to years and days just like how it is done in the second picture?
Can you please help me solve for the Return on Investment and Break-Even Point based on the data that is provided? Also, how do I convert the result of Break-Even Point to years and days just like how it is done in the second picture?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Can you please help me solve for the Return on Investment and Break-Even Point based on the data that is provided? Also, how do I convert the result of Break-Even Point to years and days just like how it is done in the second picture?
![2015
2016
2017
2018
2019
Total
Increased sales
500,000
530,000
561,800
595,508
631,238
Reduction in customer complaint calls
Reduced inventory costs
70,000
70,000
70,000
70,000
70,000
68,000
68,000
68,000
68,000
68,000
TOTAL BENEFITS:
638,000
668,000
699,800
733,508
769,238
PV OF BENEFITS:
619,417
629,654
640,416
651,712
663,552
3,204,752
PV OF ALL BENEFITS:
619,417
1,249,072
1,889,488
2,541,200
3,204,752
2 Servers @ $125,000
250,000
Printer
100,000
Software licenses
34,825
Server software
10,945
Development labor
1,236,525
TOTAL DEVELOPMENT COSTS:
1,632,295
Hardware
54,000
81,261
81,261
81,261
81,261
Software
20,000
20,000
20,000
20,000
20,000
Operational labor
111,788
116,260
120,910
125,746
130,776
TOTAL OPERATIONAL COSTS:
185,788
217,521
222,171
227,007
232,037
TOTAL COSTS:
1,818,083
217,521
222,171
227,007
232,037
PV OF COSTS:
1,765,129
205,034
203,318
201,693
200,157
2,575,331
PV OF ALL COSTS:
1,765,129
1,970,163
2,173,481
2,375,174
2,575,331
TOTAL PROJECT BENEFITS COSTS:
(1,180,083)
450,479
477,629
506,501
537,201
YEARLY NPV:
(1,145,712)
424,620
437,098
450,019
463,395
629,421
CUMULATIVE NPV:
(1,145,712)
(721,091)
(283,993)
166,026
629,421
RETURN ON INVESTMENT:
24.44%
(629,421/2,575,331)
BREAK-EVEN POINT:
3.63 years
[break-even occurs in year 4; (450,019 - 166,026)/450,019 = 0.63]
This service is currently provided by competitors
Improved customer satisfaction
INTANGIBLE BENEFITS:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc501e0f4-4d66-4b51-9525-2639a7285ed9%2F3c0b63c3-6bde-4834-b04f-a0053b8caa33%2Fb378rd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2015
2016
2017
2018
2019
Total
Increased sales
500,000
530,000
561,800
595,508
631,238
Reduction in customer complaint calls
Reduced inventory costs
70,000
70,000
70,000
70,000
70,000
68,000
68,000
68,000
68,000
68,000
TOTAL BENEFITS:
638,000
668,000
699,800
733,508
769,238
PV OF BENEFITS:
619,417
629,654
640,416
651,712
663,552
3,204,752
PV OF ALL BENEFITS:
619,417
1,249,072
1,889,488
2,541,200
3,204,752
2 Servers @ $125,000
250,000
Printer
100,000
Software licenses
34,825
Server software
10,945
Development labor
1,236,525
TOTAL DEVELOPMENT COSTS:
1,632,295
Hardware
54,000
81,261
81,261
81,261
81,261
Software
20,000
20,000
20,000
20,000
20,000
Operational labor
111,788
116,260
120,910
125,746
130,776
TOTAL OPERATIONAL COSTS:
185,788
217,521
222,171
227,007
232,037
TOTAL COSTS:
1,818,083
217,521
222,171
227,007
232,037
PV OF COSTS:
1,765,129
205,034
203,318
201,693
200,157
2,575,331
PV OF ALL COSTS:
1,765,129
1,970,163
2,173,481
2,375,174
2,575,331
TOTAL PROJECT BENEFITS COSTS:
(1,180,083)
450,479
477,629
506,501
537,201
YEARLY NPV:
(1,145,712)
424,620
437,098
450,019
463,395
629,421
CUMULATIVE NPV:
(1,145,712)
(721,091)
(283,993)
166,026
629,421
RETURN ON INVESTMENT:
24.44%
(629,421/2,575,331)
BREAK-EVEN POINT:
3.63 years
[break-even occurs in year 4; (450,019 - 166,026)/450,019 = 0.63]
This service is currently provided by competitors
Improved customer satisfaction
INTANGIBLE BENEFITS:
Transcribed Image Text:COVID-19 VACCINE ADMINISTRATION MANAGEMENT SYSTEM - CBA Cash Flow Method
Year 1
Year 2
Year 3
Year 4
Year 5
Improvement in data-storing
Cost-efficient data storing
750,250.00
700,250.00
650,250.00
600,250.00
550,250.00
750,000.00
650,000.00
650,000.00
550,000.00
450,000.00
Precision of vaccine administration information
190,000.00
90,000.00
90,000.00
80,000.00
80,000.00
Generate reports of vaccine administration
70.000.00
70,000.00
70,000.00
70,000.00
70,000.00
Track vaccine inventory
75,000.00
75,000.00
75,000.00
75,000.00
75,000.00
TOTAL BENEFITS :
1,835,250.00
1,585,250.00
1,535,250.00
1,375,250.00
1,225,250.00
PV OF BENEFITS :
1,781,796.12
1,494,250.16
1,404,971.23
1,221,891.81
1,056,911.41
6,907,923.77
PV OF ALL BENEFITS :
1,729,899.14
3,224,149.31
4,629,120.54
5,851,012.35
6,907,923.77
Workstations *5
354,450.00
0.00
0.00
0.00
0.00
Server
53,580.00
0.00
0.00
0.00
0.00
Software Licenses
12,000.00
0.00
0.00
0.00
0.00
Development Labor
190,000.00
0.00
0.00
0.00
0.00
Server Software
25,000.00
0.00
0.00
0.00
0.00
TOTAL DEVELOPMENT COSTS :
635,030.00
0.00
0.00
0.00
0.00
Hardware
45.000.00
45,000.00
45,000.00
45,000.00
45,000.00
Operational Labor
Consultancy Costs
280,000.00
30,000.00
280,000.00
280,000.00
280,000.00
280,000.00
30,000.00
30,000.00
30,000.00
30,000.00
TOTAL OPERATIONAL COSTS :
355,000.00
355,000.00
355,000.00
355,000.00
355,000.00
TOTAL COSTS :
990,030.00
355,000.00
355,000.00
355,000.00
355,000.00
PV OF COSTS:
961,194.17
344,660.19
344,660.19
344,660.19
344,660.19
2,311,839.00
PV OF ALL COSTS:
933,198.23
1,277,858.42
1,622,518.62
1,967,178.81
2,311,839.00
TOTAL PROJECT BENEFITS COSTS:
845,220.00
1,230,250.00
1,180,250.00
1,020,250.00
870,250.00
YEARLY NPV:
820,601.94
1,149,589.97
1,060,311.04
877,231.62
712,251.22
4,619,985.79
CUMULATIVE NPV:
796,700.91
1,946,290.89
3,006,601.92
3,883,833.54
4,596,084.76
RETURN ON INVESTMENT:
BREAK-EVEN POINT:
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