$1$ Development server

$$18,700$

$1$ Server software $($OS$,$ misc.$)$

$$1,500$

$1$ DBMS server software

$$7,500$

$7$ DBMS client software

$$\frac{950}{?}$ client

Annual Operating Costs$-$Personnel

$2$ Programmer Analysts

$125$ hours$/$ea @ $$35/$hour

$1$ System Librarian

$20$ hours$/$ea @ $$15/$hour

Annual $$perating Costs$-$Hardware, Software, and Misc.

$1$ Maintenance agreement for server

$$995$

$1$ Maintenance agreement for server

$$525$

DBMS software

Preprinted forms

$15,000/$year @ $$\mathrm{.}22/$form

The benefits of the new system are expected to come from two sources: increased sales and lower inventory levels. Sales are expected to increase by $$30,000$ in the first the project's life.

Using a format like the spreadsheets in this chapter, develop a spreadsheet that summarizes this project's cash flow, assuming a $4-$year useful life after the project is developed. Compute the present value of the cash flows, using an interest rate of $9\%.$

What is the NPV for this project? What is the ROI for this project? What is the break$-$even point? Should this project be accepted by the approval committee?