Read the case study in Appendix A$,$ and answer the following questions:

a$.$ Perform a financial analysis for the project by calculating its:

NPV$,$

ROI,

Payback period;

using a discount rate of $9\%$ and a $5-$year projection. Use Excel to perform the above analysis, and use formulae wherever possible. $($Please submit the Excel file as well.$)$

b$.$ According to business growth forecast, there is a need to purchase additional hardware and software in Year $3,$ and the costs are estimated as HK $$500,000$ for hardware and $HK$$$800,000$ for software.

Re$-$calculate the NPV$,$ ROI and payback period for this project. Open another worksheet in the spreadsheet file for this calculation.

Note that the additional hardware and software maintenance cos

Appendix A $-$ The EasyDrive School of Motoring Case Study

The EasyDrive School of Motoring was established in Glasgow in $1992.$ Since then, the school has grown steadily and now has several offices in most of the main cities of Scotland. However, the school is now so large that more and more administrative staff are being employed to cope with the everincreasing amount of paperwork. Furthermore, the communication and sharing of information between offices, even in the same city, is poor. The Director of the school, Dave MacLeod, feels that too many mistakes are being made and that the success of the school will be short$-$lived if he does not do something to remedy the situation. He has assigned this project to you to develop a database system to support the day$-$to$-$day operation of the school. In addition, he would like part of the system to be open to their customers, so that customers can perform booking and inquiry functions online, without the need for administrative support.

Initial estimates suggest a budget of $HK$$$2\mathrm{.}6$ million for the project. Of the budget, $$800,000$ is for the software, and $$500,000$ for hardware costs. The rest is for consulting and development services. The annual maintenance would be $12\%$ of the hardware cost, and $10\%$ of the software costs.

You estimate that the benefits resulting from this project are mainly savings in administrative costs of $HK$$$400,000$ for year $1,$ HK $$800,000$ for year $2,$ and $HK$$$1,300,000$ for year $3,$ and $HK$$$1,500,000$ for year $4$ and $5.$

Ref: adopted from Database Systems $-$ A Practical Approach to Design, Implementation, and Management $(5$th ed$.)$ by T$.$ Connolly and C$.$ Begg, $2010$ts will take effect fromYear $4.$