Goodwill Health Clinic plans to overhaul its patient record systems. Health Record System is a potential candidate. This system needs $10,000 to install. There are two cost categories associated with system implementation: license and maintenance. The cost for the license is $2000 each year for the first two years and then increase by $200 each year for Year 3 through 5. The maintenance cost is $1000 for the first year, increasing 10% per year after; the expected benefits of implementing Health Record System is $5000 for the first year and $8000 each year starting year 2. (Compute the total cost for each year: maintenance & license) 

 Use a discount rate of 10%. Conduct financial analysis, payback, NPV, and ROI. 

1) What is the payback period? 

2) What is the NPV in year 5? 

3) What is the ROI in year 5?

Answer rating: 100% (QA)

To perform the financial analysis we need to calculate the total cost benefits payback period net pr... View the full answer