Question:
Create a financial case for your recommendations. Return on investment template.xlsxIn ( attached below ) your posting, describe your recommendations and attach the return on investment spreadsheet with your costs and benefits. The following resources may help you: Video: Return on investment explains calculating return on investment, which is critically important before choosing specific IT initiatives.(link: https://www.youtube.com/watch?v=eoAR8ZyAyoc&feature=youtu.be ) Article: Return on investment explains return on investment. (link: www.investopedia.com/terms/r/returnoninvestment.asp ) In your responses to other students, comment on the viability of their financial cases and offer suggestions to revise the financial cases. Students will be updating the financial case for the week seven written strategy.
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Company Data Requiredrate of return 10% Tax rate 30% Initial Investment YEAR 3 Hardware costs (e.g., servers, networking hardware, PC upgrades) $1,000 $0 $0 Purchased softwarecosts/ licenses (e.g., e-commerce, ERP, CRM software) Development costs (e.g., systems designand configuration/ development) Training costs (e.g., develop and conduct initial training) $0 $0 șo șo Conversion costs (e.g., initial data conversionfrom existing systems being replaced) [Other initial investments] [Other initial investments] Total Initial Investments $1,000 Benefits from Technology Strategy YEAR 2 3 Increasedsales and revenue $1,000 $1,000 $1,000 $0 Reduced personnel costs $0 $0 Reduced product costs $0 $0 $0 Reduceddistributioncosts $0 $0 $0 Reducedadvertising and marketing costs $0 $0 $0 $0 [Other benefits] $0 $0 [Other benefits] [Other benefits] $0 $0 $0 $0 $0 $0 $1,000 $1,000 Total Benefits $1,000 Costs (Excluding Initial Capital Investments) YEAR 2 3 Depreciation on capital expenditures (calculation uses three-year period) $333 $333 $333 $0 Software licensing fees $0 $0 Ongoing user support and training(e.g., help desk and training personnel) $0 $0 $0 Ongoing systems support (e.g., IT maintenance) $0 $0 șo Hosting/ Cloud computing $0 $0 $0 General and administrative $0 $0 $0 [Other costs] $0 $0 $0 [Other costs) $0 $0 $0 [Other costs] $0 șo $0 Total Costs $333 $333 $333 Totals YEAR 3 Net Benefits (Costs) $667 $667 $667 Тах $200 $200 $200 Value after tax $467 $467 $467 Depreciation added back $333 $333 $333 Cash flow ($1,000) $800 $800 $800 Cumulative cash flow ($1,000) ($200) $600 $1.400 Evaluation Metrics Net presentvalue (NPV) $989 Internal rate of return (IRR) 60.74% Payback period (in years) 1.25 Three-year total ROI: (total benefits before taxes- total costs)/total costs 200.00%