Purchase the Fun Soft package: Cost $100,000 for software, $2,000 annual licensing fee for the life of the contract. There will be an annual saving of $25,000 due to the layoff of a clerk. Assume six-year life for the software 10% discount rate Given the information above perform IRR, Simple Payback and NPV analysis Download file Payback IRR NPV Worksheet.xlsx

Download Payback IRR NPV Worksheet.xlsx Follow instructions in the following document Cash Flow, NPV, Payback, and IRR Links to an external site.

Payback, Internal Rate of Return and NPV
Payback
Year	0	1	2	3	4	5	6
Expense
Income/Saving
Annual Cash Flow
Cummulative Cash Flow
Internal Rate Of Return
Payback (year)
Discount Rate
Present Value
NPV

Create a Worksheet to Calculate Cash Flow, NPV, Payback, and IRR

Projects that purport to save money or earn additional money in the future as a result of spending money now can be evaluated and compared using basic financial tools. A simple payback analysis determines how long it will be before the result of the project pays off the initial investment, and the internal rate of return (IRR) is a percentage similar to an interest rate that can be compared to other projects or investment opportunities.

• Sample Project Description:
  • Purchase the FunSoft package: Cost $100,000 for software, $2,000 annual licensing fee for the life of the contract. There will be an annual saving of $25,000 due to the layoff of a clerk.
  • Assume
    • six-year life for the software
    • 10% discount rate

• Given the information above perform IRR, Simple Payback and NPV analysis