1) Purchase the SoftComm package, which will operate on the vendors hardware: Cost $140,000 for a eight-year license, payable up front. The maintenance contract, at $5,000 a year, includes all currently identified modifications to the software. 2) Purchase the StarWeb package, which will operate on the vendors hardware: Cost $120,000 for a eight-year license, payable up front. The maintenance contract, at $8,000 a year, includes all currently identified modifications to the software.

Implementation of any of these packages will result in cutting the clerks hours by half, for a saving of $35,000 a year. Assume a eight-year life for the both software packages, A company uses 12% discount rate.

• Given the information above carry out three forms of analysis for both opportunities:
  • IRR
  • Breakeven
  • NPV
• Use performed analysis to decide which opportunity is better
• Provide recommendation what opportunity should be invested in.
• Explain your decision.
• Submit an Excel file with analysis of opportunities, your reccomendation and explanation.