Question: A new IS project has been proposed that is expected to produce cost savings but also an increase in revenue. The initial cost to establish

A new IS project has been proposed that is expected to produce cost savings but also an increase in revenue. The initial cost to establish the system is estimated to be $750,000. The remaining cash flow data is presented in the following table( number are thousands).

Year 1 Year 2 Year 3 Year 4 Year 5

Increased Revenue($) 50 125 160 250 250

Cost Savings($) 25 75 75 75 75

Depreciation($) - 100 100 125 100

Initial Expense($) 750

Calculate the return on investment (ROI) for this project? Assume the cost of capital is 7%.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

A new IS project has been proposed that is expected to produce cost savings but also an increase in revenue. The initial cost to establish the system is estimated to be $750,000. The remaining cash...

Q:

A new IS project has been proposed that is expected to produce cost savings but also an increase in revenue. The initial cost to establish the system is estimated to be $750,000. The remaining cash...

Q:

A new IS project has been proposed that is expected to produce cost savings but also an increase in revenue. The initial cost to establish the system is estimated to be $750,000. The remaining cash...

Q:

A new Information Systems (IS) project has been proposed that is expected to produce cost savings but also an increase in revenue. The initial cost to establish the system is estimated to be...

Q:

A new IS project has been proposed that is expected to produce not only cost savings but also an increase in revenue. The initial costs to establish the system are estimated to be $500,000. The...

Q:

A new IS project has been proposed that is expected to produce not only cost savings but also an increase in revenue. The initial capital cost to establish the system is estimated to be $500,000. The...

Q:

Please help answer Chp 2 Problem 2A & 2B by using excel formulas PROBLEM-SOLVING EXERCISES 1. Identify three companies that make the highest quality products or services for an industry of your...

Q:

A new IS project has been proposed that is expected to produce not only cost savings but also an increase in revenue. The initial capital cost to establish the system is estimated to be $500,000. The...

Q:

please help PROBLEM-SOLVING EXERCISES 1. Identify three companies that make the highest- quality products or services for an industry of your choice. Find the number of employees, total sales, total...

Q:

Exercise 2: A new IS project has been proposed that is expected to produce not only cost savings but also an increase in revenue. The initial capital cost to establish the system is estimated to be...

Q:

A 140- lossless line is terminated in a load impedance ZL = (280 + j182) . If = 72 cm, find (a) the reflection coefficient , (b) the voltage standing-wave ratio S, (c) the locations of voltage...

Q:

Leisurescape is planting a rectangular flower garden with a perimeter of 18 ft and a diagonal of 41 ft. Find the dimensions of the garden.

Q:

? _ _ _ _ _ _ _ _ _ _ _ _ _ _ i s N O T a n e l e c t r o n i c m e a n s t o t r a n s f e r p a y m e n t s . Q u e s t i o n 2 4 o p t i o n s : W i r e t r a n s f e r s T i m e d r a f t s A C H...

Q:

Write a one-page email (approximately 350400 words) to all the staff members of your selected fashion retail chain providing the details of a compulsory intercultural communication workshop, and...

Q:

Discuss the competitive forces in the industry in which Airbnb is competing and provide evidence from the provided case study to support your answer. Hint: Use Porters 5 Forces model to guide your...

Q:

Reaction of 1.998 g zinc with 2.051 g iodine produces 2.597 g zinc iodide, leaving 1.481 g of unreacted zinc. What does the sign of the error suggest as a source of error in the experiment? Calculate...

Q:

The aireraft A with radar detection equipment is flying horizontally at an altitude of 12 km and is in- creasing its speed at the rate of 1.2 m/s each sec- ond. Its radar locks onto an aircraft B...

Q:

Q2) Even though independent gasoline stations have been having a difficult time in recently years, Ege Koak is thinking about starting his own independent gasoline station. Before starting...

Q:

1. Discuss what you think is meant by the following statements: a) Splitting an egg into half to get two chickens. b) We cannot study time by taking apart a clock.

Q:

5. Give some examples of hidden knowledge.

Q:

3. Try to clarify how you think when you are going to write a note aimed at influencing the leader of the department. Remember, it is not what you think, but how you think that should be clarified....