3. Based on your analysis, which solution would you prefer to implement?

Select one:

a. SOLUTION A

b. SOLUTION B

You have been assigned to improve the existing inventory sysem at a university bookstore. After conducting initial study, you have proposed 2 solutions: Solution A and Solution B with following cost and benefit information. All amounts are in USD. Year 0 1 2 3 4 5 Solution A Cost Benefit 40,000 12,000 15,000 27,000 15,000 32,000 22.000 37,000 24,000 39,000 26,000 45,000 Solution B Cost Benefit 75,000 30,000 25,000 30,000 37,000 30,000 65,000 45,000 85,000 15,000 85,000 3 Questions: 1) Assuming 10% discount rate, calculate NPV of Solution A and Solution B. 2) Calculate ROI of Solution A and Solution B. 3) Based on your NPV calculations, select the right solution for implementing the new system. Use MS Excel for calculations. All the answers should be formatted to two decimal places without any other notation/symbol. Use minus sign (-) for negative numbers. Question 1 ALL THE ANSWERS SHOULD BE FORMATTED TO 2 DECIMAL PLACES WITHOUT USING COMMA OR DOLLAR SIGN. 1 2 3 Not yet answered Marked out of 48.00 SOLUTION A Discount rate 10% Finish attempt ... Flag question Year 0 2 3 4 5 Total Costs 40,000 15,000 15,000 22,000 24,000 26,000 Discount factor Discounted cost Benefits 12,000 27,000 32,000 37,000 39,000 45,000 Discount factor Discounted benefits Discounted benefits - discounted costs Cumulative benefits - cumulative costs ROI = NPV= Next page PREVIOUS ACTIVITY Assignment 3 NPV NEXT ACTIVITY Assignment 4 Requirements >> Jump to... + ALL THE ANSWERS SHOULD BE FORMATTED TO 2 DECIMAL PLACES WITHOUT USING COMMA OR DOLLAR SIGN. Question 2 Not yet answered Marked out of 48.00 SOLUTION B Discount rate 10% P Flag Year question 0 1 2 3 4 5 Total Costs 75,000 30,000 30,000 30,000 45,000 15,000 Discount factor Discounted cost Benefits 0 25,000 37,000 65,000 85,000 85,000 Discount factor Discounted benefits Discounted benefits - discounted costs Cumulative benefits - cumulative costs ROI = NPV= Previous page Next page PREVIOUS ACTIVITY Assignment 3 NPV NEXT ACTIVITY Assignment 4 Requirements >> You have been assigned to improve the existing inventory sysem at a university bookstore. After conducting initial study, you have proposed 2 solutions: Solution A and Solution B with following cost and benefit information. All amounts are in USD. Year 0 1 2 3 4 5 Solution A Cost Benefit 40,000 12,000 15,000 27,000 15,000 32,000 22.000 37,000 24,000 39,000 26,000 45,000 Solution B Cost Benefit 75,000 30,000 25,000 30,000 37,000 30,000 65,000 45,000 85,000 15,000 85,000 3 Questions: 1) Assuming 10% discount rate, calculate NPV of Solution A and Solution B. 2) Calculate ROI of Solution A and Solution B. 3) Based on your NPV calculations, select the right solution for implementing the new system. Use MS Excel for calculations. All the answers should be formatted to two decimal places without any other notation/symbol. Use minus sign (-) for negative numbers. Question 1 ALL THE ANSWERS SHOULD BE FORMATTED TO 2 DECIMAL PLACES WITHOUT USING COMMA OR DOLLAR SIGN. 1 2 3 Not yet answered Marked out of 48.00 SOLUTION A Discount rate 10% Finish attempt ... Flag question Year 0 2 3 4 5 Total Costs 40,000 15,000 15,000 22,000 24,000 26,000 Discount factor Discounted cost Benefits 12,000 27,000 32,000 37,000 39,000 45,000 Discount factor Discounted benefits Discounted benefits - discounted costs Cumulative benefits - cumulative costs ROI = NPV= Next page PREVIOUS ACTIVITY Assignment 3 NPV NEXT ACTIVITY Assignment 4 Requirements >> Jump to... + ALL THE ANSWERS SHOULD BE FORMATTED TO 2 DECIMAL PLACES WITHOUT USING COMMA OR DOLLAR SIGN. Question 2 Not yet answered Marked out of 48.00 SOLUTION B Discount rate 10% P Flag Year question 0 1 2 3 4 5 Total Costs 75,000 30,000 30,000 30,000 45,000 15,000 Discount factor Discounted cost Benefits 0 25,000 37,000 65,000 85,000 85,000 Discount factor Discounted benefits Discounted benefits - discounted costs Cumulative benefits - cumulative costs ROI = NPV= Previous page Next page PREVIOUS ACTIVITY Assignment 3 NPV NEXT ACTIVITY Assignment 4 Requirements >>