4. Martin is working to develop a preliminary cost-benefit analysis for a new client-server system. He has identi- fied a number of cost factors and values for the new system, summarized in the following tables: Development Costs-Personnel 2 Systems Analysts 4 Programmer Analysts 1 GUI Designer 1 Telecommunications Specialist 1 System Architect 400 hours/ea @$50/hour 250 hours/ea @$35/hour 200 hours/es $40/hour 50 hours ea @$50/hour 100 hours/ea $50/hour I Database Specialist 1 System Librarian Development Costs Training 15 hours/ea @$45/hour 250 hours ea @$15/hour 4 Oracle training registration $3,500/student Development Costs-New Hardware and Software I Development server I Server software (OS, misc.) I DBMS server software $18,700 $1,500 $7,500 $950 client Annual Operating Costs-Personnel 2 Programmer Analysts 7 DBMS client software 1 System Librarian 125 hours ea @$35/hour 20 hours/ea @$15/hour Annual Operating Costs-Hardware, Software, and Misc. 1 Maintenance agreement for server I Maintenance agreement for server DBMS software Preprinted forms 5995 $525 15,000/year @ $.22/form The benefits of the new system are expected to come from two sources; increased sales and lower inventory levels. Sales are expected to increase by $30,000 in the first year of the system's operation and will grow at a rate of 10% each year thereafter. Savings from lower inventory levels are expected to be $15,000 per year for each year of the project's life. Using a format similar to the spreadsheets in this chapter, develop a spreadsheet that summarizes this project's cash flow, assuming a four-year useful life after the project is developed. Compute the present value of the cash flows, using an interest rate of 9%. What is the NPV for this project? What is the ROI for this project? What is the break-even point? Should this project be accepted by the approval committee?