Assume monetary benefits of a new automated dental office scheduling and billing system of $50,000 in...

Transcribed Image Text:

Assume monetary benefits of a new automated dental office scheduling and billing system of $50,000 in the 2nd year and increasing incremental benefits of $40,000 a year for the next 3 years. There is a monthly cost for cloud hosting services of $12,000. Hosting costs are estimated to increase by 3% per year. There are annual license fees of $125/per user. There will be 40 users for the life of the system. The initial software purchase has a one-time purchase cost of $30,000 in year 1. The system will go live at the start of the 2nd year. The discount rate that the finance manager for the office has asked you to use is 10%. 1. Using a five-year horizon (current plus four), calculate the net present value of this project. 2. Calculate the overall ROI for the new dental office system. 3. What intangible benefits do you think the system might have? 4. What intangible costs do you think the dental office is experiencing? Assume monetary benefits of a new automated dental office scheduling and billing system of $50,000 in the 2nd year and increasing incremental benefits of $40,000 a year for the next 3 years. There is a monthly cost for cloud hosting services of $12,000. Hosting costs are estimated to increase by 3% per year. There are annual license fees of $125/per user. There will be 40 users for the life of the system. The initial software purchase has a one-time purchase cost of $30,000 in year 1. The system will go live at the start of the 2nd year. The discount rate that the finance manager for the office has asked you to use is 10%. 1. Using a five-year horizon (current plus four), calculate the net present value of this project. 2. Calculate the overall ROI for the new dental office system. 3. What intangible benefits do you think the system might have? 4. What intangible costs do you think the dental office is experiencing?

Answer rating: 100% (QA)

1To calculate the net present value NPV of the project we need to determine the present value of all cash flows over the fiveyear horizon and subtract ... View the full answer