Questions to Answer using the Excel Workbook

1. Assume a Discount Rate of 15%. What is the Overall Net Present Value for the project? When will the project break-even? Should ESE move forward with the project and proceed with implementing SAP? Explain your answer.
2. Assume a Discount Rate of 30%. What is the overall Net Present Value for the project? When will the project break-even? Should ESE move forward with the project and proceed with implementing SAP? Explain your answer.
3. Under the Benefits tab, assume the value of the Total Recurring Benefits Due to Increased Sales is only $375,000 instead of $750,000. In addition, assume the Reduced Inventory Holdings Costs are only $50,000 instead of $250,000. And, in the Cost Benefit Analysis, assuming a Discount Rate of 15%, what is the Overall Net Present Value for the project? When will the project break-even? Should ESE move forward with the project and proceed with implementing SAP? Explain your answer.
4. Under the Benefits tab, assume the value of the Total Recurring Benefits Due to Increased Sales is only $375,000 instead of $750,000. In addition, assume the Reduced Inventory Holdings Costs are only $50,000 instead of $250,000. In the Cost Benefit Analysis, at what Discount Rate is the project economically feasible?* Should ESE move forward with the project and proceed with implementing SAP? What are the implications of the changes to the economic feasibility of the project? Explain your answer. *(Please note that for Que. 4, the discount rate you calculate must include four decimal places of accuracy, for example: 12.3456%).