I think we need a website for our store, Thabo tells Beatrice. Why? asks Beatrice.

Everybody has one. Its the wave of the future, responds Thabo.

Im still not clear, Thabo. What would be on our website? Beatrice asks.

Well, for one thing we could have a picture of our market with me and you standing in front of it, says Thabo.

What else? asks Beatrice.

Thabo answers, Maybe people could look up stuff and order it through the website. Yeah, those college kids would think thats great; theyre into using computers all the time. That will increase our business. Theyll buy food from our store rather than the take-aways they always eat or get delivered from Sams Curry Shop. And those people who live in the senior citizens home would use it too. I heard theyre teaching them how to use computers. And maybe we can even set up a delivery service.

Hold on, says Beatrice. Those college students get takeaways from Sams at all hours of the night. Long after were closed. And I think the older people enjoy getting out to eat every now and then. They have a van that brings some of them here each day to shop; and they really dont buy much anyway. And how will they pay for what they order through the website? Im all for keeping up with things, but Im not sure this makes sense for our little supermarket, Thabo. What would we be trying to accomplish with a website?

I just explained it to you, Beatrice. Its the way all businesses are going. We either keep up with things or well be out of business, replies Thabo.

Does this have anything to do with that Chamber of Commerce meeting you went to in Durban last week, where you said they had some consultant talking about e-business or something? asks Beatrice.

Yeah, maybe, Thabo says. I think Ill give him a call and tell him to stop by and tell him what I want.

How much is all this going to cost us, Thabo? asks Beatrice.

I think we need to think about this some more. You know we are probably going to have to pave the parking lot this summer. Thabo answers,

Dont worry. Itll all work out. Trust me. Our business will increase so much, itll pay for itself in no time. Besides, it cant cost that much; this consultant probably does these kinds of projects all the time.

	QUESTION 1 NET PRESENT VALUE AND PERT ESTIMATION	30 MARKS
	The above case study addresses the challenges faced by small businesses when embarking on IT projects. Read the scenario and then answer the questions that follow below.
	Required:
1.1	For the first stage of decision-making, a decision has to be made on whether to build or outsource the software. Complete the net present value (NPV) analysis in the answer sheet provided.	(42 x = 21)
1.2	Which of the options is most viable to the organization in terms of potential for return on investment and why?	(4)
1.3	Which of the options is most viable to the organization in terms of potential for return on investment and why? Explain why in your opinion the management is likely to make an informed decision to invest based on the NPV valuation method.	(5)