A company is trying to project if it needs to undertake a new project for replacement of a CRM system. The current operating cost to maintain the old CRM system is 850K growing at a rate of 10% year over year for the next 5 years.

If a new System is built, the current Salaries and Wages associated with NEW development is.

The operating cost to maintain the new system is 250K year over year for the next 5 years.

So if we consider a discount rate of 12%, financially, considering a NPV analysis, should the company engage in NEW CRM product developmet. ?

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Summary of development costs for RMO customer support system project Expense category Amount Salaries/wages Equipment/installation Training Facilities Utilities Support staff Travel/miscellaneous Licenses Total $496,000.00 $385,000.00 $78,000.00 $57,000.00 $152,000.00 $38,000.00 $112,000.00 $18,000.00 $1,336,000.00 Summary of development costs for RMO customer support system project Expense category Amount Salaries/wages Equipment/installation Training Facilities Utilities Support staff Travel/miscellaneous Licenses Total $496,000.00 $385,000.00 $78,000.00 $57,000.00 $152,000.00 $38,000.00 $112,000.00 $18,000.00 $1,336,000.00