IT Project Management Subject

Using the given question to do the financial feasibility

1. 2. Assuming monetary benefits of an information system at $85,000 per year, one-time costs of $75,000, recurring costs of $35,000 per year, a discount rate of 12 percent, and a five-year time horizon, calculate the net present value of these costs and benefits of an information system. Also calculate the overall return on investment of the project and then present a break-even analysis. At what point does breakeven occur? Assume monetary benefits of an information system of $40,000 the first year and increasing benefits of $10,000 a year for the next five years (year 1 = $50,000, year 2=$60,000, year 3 = $70,000, year 4 = $80,000, year 5 = $90,000). One- time development costs were $80,000 and recurring costs were $45,000 over the duration of the system's life. The dis- count rate for the company was 11 percent. Using a six-year time horizon, calculate the net present value of these costs and benefits. Also calculate the overall return on investment and then present a break-even analysis. At what point does breakeven occur