do "high level financial analysis" and "further breakdown cost" for the given project.

Senior managers now want to see some high level financial analysis for this project to help them make some important decisions on functionality and system life:

$-$Assume it will cost $$1$ million in year $0$ to provide the basic software functionality required $($software license and software development$).$

o If you add the ability to make team assignments across the organization and professional development management and tracking, it will cost an additional $$500,000$ in year $0.$

$-$Maintenance costs each year are estimated to be $20\%$ of the initial investment cost.

$-$ Assume the benefits of the basic system are conservatively projected to be $$500,000$ each year for

the life of the system.

o Assume the benefits would be $$700,000$ each year for the life of the system with the added capabilities.

$-$ Assume a three$-$year system life and discount rate of $8\%$ in calculating the ROI, NPV$,$ payback period and IRR.

o Use the same information but assume a $5-$year system life.

In your final presentation:

show a spreadsheet for the $3-$year system life on one$-$page and the $5-$year system life on a separate

page.

Also write a one$-$page analyzing the results, clearly explaining the financial differences between the

basic versus expanded system and the $3-$year versus $5-$year system life, and differences between

high$-$leval analysis and more detail cost breakdown analysis.

Based on the financial analysis, would you recommend doing just the basic system now or providing

the added functionality? How long a system life is more economical?