Assume that your company is planning to implement a new information system to improve its operations....

 

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Assume that your company is planning to implement a new information system to improve its operations. For this purpose, the company top management is evaluating two information systems project proposals. The costs and benefits details for the two proposals are shown in the following tables. (The marginal value of money is 15% per year) Proposal A Year Costs Benefit 0 250000 1 5000 100000 2 6000 150000 3 7000 200000 Proposal B Year Costs Benefit 0 52000 0 1 6000 200000 2 8000 250000 3 11000 300000 Evaluate the two proposals and determine the better by using the following: 1. Payback 2. Net present value (NPV) 3. Return on investment (ROI) Assume that your company is planning to implement a new information system to improve its operations. For this purpose, the company top management is evaluating two information systems project proposals. The costs and benefits details for the two proposals are shown in the following tables. (The marginal value of money is 15% per year) Proposal A Year Costs Benefit 0 250000 1 5000 100000 2 6000 150000 3 7000 200000 Proposal B Year Costs Benefit 0 52000 0 1 6000 200000 2 8000 250000 3 11000 300000 Evaluate the two proposals and determine the better by using the following: 1. Payback 2. Net present value (NPV) 3. Return on investment (ROI)

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Answer To evaluate the two proposals lets calculate the Payback Period Net Present Value NPV and Ret... View the full answer