Question: A sales director is deciding whether to implement a new computer - based contact management and sales processing system. His department has only a few

A sales director is deciding whether to implement a new computer-based contact management and sales processing system. His department has only a few computers, and his salespeople are not computer literate. He is aware that computerized sales forces are able to contact more customers and give a higher quality of reliability and service to those customers. They are more able to meet commitments, and can work more efficiently with fulfillment and delivery staff. His financial cost/benefit analysis is shown below:
10 network-ready PCs with supporting software @$2,450 each
1 server @ $3,500
3 printers @ $1,200 each
Cabling & Installation @ $4,600
Sales Support Software @ $15,000
Training costs per annual:
Computer introduction -8 people @ $400 each
Keyboard skills -8 people @ $400 each
Sales Support System -12 people @ $700 each
The benefits of the new yor are pe people Fion to source: iporease sales and low's inventory levels. Sales are expert potic co come som to in the list year of the system's operation and will grow at a rate of 10% each year thereafter. Savings from lower inventory levels are expected to be $10,000 per year for each year of the project's life. Assuming a three-year useful life after the project is developed. (i) Compute the present value (PV) of the cash flows, (il)
NPV,(iii) ROI and (iv) BEP using, using an interest rate of 10%.

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