Given these figures, prepare a spreadsheet model that com- putes the expected value of the annual revenues to be pro- duced by this new system. 4. Martin is working to develop a preliminary cost-benefit anal- ysis for a new client-server system. He has identified a number of cost factors and values for the new system, summarized in the following tables: Development Costs ---Personnel 2 Systems Analysts 400 hours/ea @ $50/hour 4 Programmer Analysts 250 hours/ea @ $35/hour 1 GUI Designer 200 hours/ea e $40/hour 1 Telecommunications Specialist 50 hours/ea @ $50/hour PPENDIX 1A-DETAILED ECONOMIC FEASIBI ing360 A 1 System Architect 100 hours/ea @ $50/hour 1 Database Specialist 15 hours/ea @ $45/hour 1 System Librarian 250 hours/ea @ $15/hour Development Costs ---Training 4 Oracle training registration $3500/student Development Costs-New Hardware and Software 1 Development server $18,700 1 Server software (OS, misc.) $1500 1 DBMS server software $7500 7 DBMS client software $950/client Annual Operating Costs--Personnel 2 Programmer Analysts 125 hours/ea @ $35/hour 1 System Librarian 20 hours/ea @ $15/hour Annual Operating Costs-Hardware, Software, and Misc. 1 Maintenance agreement for server $995 1 Maintenance agreement for server $525 DBMS software Preprinted forms 15,000/year @ $.22/form The benefits of the new system are expected to come from two sources: increased sales and lower inventory levels. Sales are expected to increase by $30,000 in the first 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 $15,000 per year for each year of the project's life. ode Using a format similar to the spreadsheets in this chap- ter, develop a spreadsheet that summarizes this project's cash flow, assuming a 4-year useful life after the project is devel- oped. Compute the present value of the cash flows, using an interest rate of 9%. What is the NPV for this project? What is the ROI for this project? What is the break-even point? Should this proj- ect be accepted by the approval committee? Additional Cost and Benefits (This is in addition to what is listed in the book) 1. Additional Cost Loss in productivity in year 1 of the operation only Chances 25% 35% 40% Cost of Loss in productivity $45,000 $55,000 $60,000 2. Additional Benefit/Loss Customer Satisfaction Current customer satisfaction is 3.00. New system will improve satisfaction level as follows Year Satisfaction Year 1 of operation (After development of the system) 2.85 3.14 Year 2 3.25 Year 3 3.22 Year 4 Each one-point increase or decrease per annum in Customer Satisfaction is valued at $250,000. Please add these two modification to the problem. age 1 of 1 105 words Focus