$7$:$32$

$\mathrm{.}11$~~$0$

Assignment $1-$ NPV

This is an individual assignment.

Please complete the following exercise and submit to Assignment $1$ dropbox by due date $($see schedule for due dates$).$

Assuming monetary benefits of a construction project at $$50,000$ per year, one$-$time costs $($initial investment$)$ of $$15,000,$ recurring costs of $$35,000$ per year, a discount rate of $10$ per cent, and a $4-$year time horizon, calculate the net present value $($NPV$)$ of an information system's costs and benefits. Calculate the overall return on investment $($ROI$)$ of the project. During which year does break$-$even occur?

Write a paragraph explaining whether you would recommend investing in this project based on your financial analysis.

Explain your answer referring to the NPV$,$ ROI and payback for this project.

Discount Rate $(10\%)$

Year $0-1\mathrm{.}0000($used for initial investment$)$

Year $1-.9091$

Year $2-\mathrm{.}8264$

Year $3-\mathrm{.}7513$

Year $4-\mathrm{.}6830$

Write a paragraph explaining whether you would recommend investing in this project based on your financial analysis. Explain your answer referring to the NPV$,$ ROI and payback for this project.

AA

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