This question has been asked once before by someone else, but the answer does not look accurate or complete. Thank you for your help.

Congratulations! You have been promoted at work and get to make an executive decision. Your company has a choice in which software product to purchase with the following information.

1. You need to determine an interest rate to useselect an interest rate and explain why you think this number should be used. Use it in your calculations in item 1.2.
2. Given the information below on options 1 and 2, carry out three forms of analysis: breakeven, ROI, and NPV.
3. Make a recommendation on which way to proceed, based on the TCO for each option.

Option 1: Purchase the BigBlueSoftware Company package: Cost $250,000 for software and $105,000 for hardware in year one; with $35,000 to customize it and a $40,000 annual licensing fee for the life of the contract. There will be an annual saving of $71,000 due to the layoff of a clerk.

Option 2: Purchase the BigSoftwareCompany package, which will operate on the vendors hardware(ie a cloud product): Cost $350,000 for a five-year license, payable half up front and half during the first year of implementation. The maintenance contract, at $84,000 a year, includes all currently identified modifications to the software for the first three years. The clerks hours will be cut by half, for a saving of $35,000 a year.

In both cases, sales are expected to increase from the current $1 million a year, by 11% per year each year (over each years previous years sales) after full implementation. Assume a five-year life for the software.

You should complete this in Excel and attach your worksheet in addition to the Word Document you will be submitting to explain the rational and various costs.