You have been asked to calculate the Return on Investment (ROI) for a project whose development will
Question:
You have been asked to calculate the Return on Investment (ROI) for a project whose development will be accomplished during a single calendar year with the go-live date of Jan 1st The project, to develop a new Web-based ordering and fulfillment system, has already been conceptualized, and the team has provided estimates and a partial resource plan. Labor Operating expenses in years 2 through 5 are projected to be $35,000 annually. Miscellaneous expenses in years 2 through 5 are projected to be $6,500 annually. The benefit is projected to be $300,000 the first year of operation, increasing 7% each year. Hardware cost that would be installed for development is $100,000. You’ll need to complete the resource plan, the 5 year planning sheet, and calculate a 5 year ROI. Please finish filling out these tables and answer the associated questions.
Question 1 : What is the total labor cost of development?
Question 2 ]: What is the total expense of this project projected to be for the first 5 year period?
Question 3 : What is the total benefit projected to be for the first year?
Question 4 : What is the total benefit projected to be for the first five years?
Question 5: If the company could just put the money to cover the project expenses in the bank (instead of doing this project) it could make an investment gain of 5% (total) over this same 5 year period. Should the company invest in this project, or put the money in the bank? Why?
Question 6: Describe in your own words BRIEFLY why APO05 and APO06 are important to project funding selection based on ROI calculation?
Principles of Information Systems
ISBN: 978-1133629665
11th edition
Authors: Ralph Stair, George Reynolds