Interglobal Paper Company is considering replacing their present computer system with a new system. Management has asked you to prepare a cost - benefit analysis to present to the board of directors so that they can decide whether to proceed with the project.

Using the data presented in Problems 10 and 11 at the end of Chapter 3 in our textbook (Pages 96 & 97):

1. Use Excel to determine the year in which the new system will break-even. (Hint: Use the annual cost, not the cumulative cost.)

2. Use Excel to graph the costs of the present and proposed systems over 4 years indicating the break-even point.

3. Use Excel to determine the payback period of the proposed system. (Hint: Use the cumulative cost, not the annual cost.)

4. Use Excel to graph the benefits versus the cost of the proposed system over 4 years indicating the payback period.

Gedda for it the land for V i ewing a three years 9. Do the data for Viking Village appear to have a cyclical variation Explain 10. Imercobal Paper Company has asked for your help in comparing its present computer system with a new ones board of directors would like to be implemented Proposed system and present system Proposed System Costs Present System Cod 11.00 520000 .000 Year Et Salaries Ol Bevelge 3000 30.000 5 520000 DO 50 3.300 Over Development 12.000 ent $20.000 SIS Overhead 4900 520000 19 5.500 S10.500 66.000 Overhead Development Cathed how the even point here to search e 9 - In CC GC SC SC GC G C G C G C G C C G + ndall-sad.pdf cven analysis, determine the year in which Interglobal Paper will break even costs and show the break-even point MS ANALYSIS FUNDAMENTALS 1. The following are system benefits for Intel global Paper Company (from Problem 10): Benefits 555.000 5.000 S0000 85.00 a. Use the costs of Interglobal Paper's proposed system from Problem 10 to determine the payback period (use the payback method) b. Graph the benefits versus the costs and indicate the payback period. 12. Glenn's Electronics, a small company, has set up a computer service. The table that follows shows the revenue expected for the first five months of operation, in addition to the costs for office remodeling, and so on. Determine the cash flow and accumulated cash flow for the company. When is Glenn's expected to show a profit? July $35,000 August $36,000 September $42.000 October $48,000 November $57.000 Revente $25.000 11.000 S13,300 $14,600 516,000 Costs Office Remodeling Salaries Training Equipment Lease Supplies WW. 12.100 6,000 8.480 3.150 8.000 3,000 9,000 3.300 9.540 3.460 10.110 3.610 Gedda for it the land for V i ewing a three years 9. Do the data for Viking Village appear to have a cyclical variation Explain 10. Imercobal Paper Company has asked for your help in comparing its present computer system with a new ones board of directors would like to be implemented Proposed system and present system Proposed System Costs Present System Cod 11.00 520000 .000 Year Et Salaries Ol Bevelge 3000 30.000 5 520000 DO 50 3.300 Over Development 12.000 ent $20.000 SIS Overhead 4900 520000 19 5.500 S10.500 66.000 Overhead Development Cathed how the even point here to search e 9 - In CC GC SC SC GC G C G C G C G C C G + ndall-sad.pdf cven analysis, determine the year in which Interglobal Paper will break even costs and show the break-even point MS ANALYSIS FUNDAMENTALS 1. The following are system benefits for Intel global Paper Company (from Problem 10): Benefits 555.000 5.000 S0000 85.00 a. Use the costs of Interglobal Paper's proposed system from Problem 10 to determine the payback period (use the payback method) b. Graph the benefits versus the costs and indicate the payback period. 12. Glenn's Electronics, a small company, has set up a computer service. The table that follows shows the revenue expected for the first five months of operation, in addition to the costs for office remodeling, and so on. Determine the cash flow and accumulated cash flow for the company. When is Glenn's expected to show a profit? July $35,000 August $36,000 September $42.000 October $48,000 November $57.000 Revente $25.000 11.000 S13,300 $14,600 516,000 Costs Office Remodeling Salaries Training Equipment Lease Supplies WW. 12.100 6,000 8.480 3.150 8.000 3,000 9,000 3.300 9.540 3.460 10.110 3.610