As a systems analyst, you are preparing a new information system project proposal for

management that require you to create a costs$-$benefits analysis prior to project presentation.

Assume that the project is expected to return monetary benefits of $$55,000$ per year, one$-$time

costs of $$75,000,$ and recurring costs of $$15,000$ per year. The project has a discount rate of

$10\%$ and a five$-$year time horizon.

a$)$ Create a costs$-$benefits analysis spreadsheet similar to Figure $5-6$ in Chapter $5.(10$ points$)$

b$)$ Calculate net present value $($NPV$)$ of benefits for each year. $(10$ points$)$

c$)$ Calculate net present value $($NPV$)$ of costs for each year. $(10$ points$)$

d$)$ Calculate overall net present value $($NPV$)$ at the end of project life. $(5$ points$)$

e$)$ Calculate overall return on investment $($ROI$)$ at the end of project life. $(5$ points$)$

f$)$ Perform break$-$even analysis $($BEA$)$ for the project. $(5$ points$)$

g$)$ Calculate break$-$even point for this project. $(5$ points$)$

$2)$ You are also proposing a second project with variable costs and returns. Assume that the

project is expected to return monetary benefits of $$50,000$ the first year, and increasing

benefits of $$10,000$ until the end of project life $($year $1=$ $$50,000,$ year $2=$ $$60,000,$ year $3=$

$$70,000,$ year $4=$ $$80,000,$ year $5=$ $$90,000).$ The project also has one$-$time costs of

$$35,000,$ and variable recurring costs of $($year $1=$ $$25,000,$ year $2=$ $$30,000,$ year $3=$

$$35,000,$ year $4=$ $$40,000,$ year $5=$ $$45,000)$ until the end of project life. The project has a

discount rate of $8\%$ and a five$-$year time horizon.

a$)$ Create a costs$-$benefits analysis spreadsheet similar to Figure $5-6$ in Chapter $5.(10$ points$)$

b$)$ Calculate net present value $($NPV$)$ of benefits for each year. $(10$ points$)$

c$)$ Calculate net present value $($NPV$)$ of costs for each year. $(10$ points$)$

d$)$ Calculate overall net present value $($NPV$)$ at the end of project life. $(5$ points$)$

e$)$ Calculate overall return on investment $($ROI$)$ at the end of project life. $(5$ points$)$

f$)$ Perform break$-$even analysis $($BEA$)$ for the project. $(5$ points$)$

g$)$ Calculate break$-$even point for this project. $(5$ points$)$

What to Submit?

Submit a PDF document on Canvas before the due date.