Compute Net Present Value Annual Accounting Return on Investment and Pay Back Period Homework System Analysis and Design and Excel Sheet help

Homework Assignment 

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Submit date in attached file is incorecct 

Submit the assignment online on Blackboard using Assignments>HW2 option. No hard copy submissions will be accepted. All assignments must be submitted by midnight on the day when the assignment is due i.e. by 12 midnight on Blackboard. You are given additional 10 minutes to account for any technological issues you might face to submit your assignment on Blackboard. After 12:10 AM, no assignment submission will be accepted and graded.

Submit only MS-Word files. Please note this is an individual assignment and not a group assignment i.e. you have to submit your responses to the questions below individually.

You are NOT allowed to collaborate with your class members to work on this homework assignments. You can use Internet resources to do research for the assignment. You can also consult with your professor regarding this homework assignments and ask for advance feedback before you submit your homework. After the homework assignments have been graded, you will have the opportunity to discuss this homework assignment in the class with your instructor.

Q1. A company wishes to implement a system to support their Service Awards Program. In this program, employees are given gifts and awards based on the number of years of service that they have given the company. This system is an expansion of an existing paper-based system that currently has much inefficiency. It is the hope of the company president that a new system will provide them with economies of scale and reduced operating costs that will outweigh the costs of designing and building the system. You have been asked to complete an economic feasibility analysis for this project.

The IT department will manage the project, which is expected to take 15 weeks for requirements analysis and design, 10 weeks for construction and 5 weeks for implementation. The average expenditure per week for each of these tasks is shown in the table below.

The system is expected to reduce the staffing requirements by 15% starting next year and currently, there are 30 employees in the company. HR reports that the average annual salary per full time employee (FTE) is currently $50K. These savings will continue for next five years. In addition, there are expected savings resulting in better inventory management of awards and reduced handling costs charged by suppliers starting one year from now. These savings amount to $2,000 per month for inventory management and $1,800 per month for handling costs. However, the IT department expects the cost of its operations to increase from next year by $825 per month and general maintenance, which includes electricity, is expected to cost $145 per month in the next year, rise to $185 per month in the following year and to $215 per month for the next three years. The new system will require the initial expenditure of $100,000 for new equipment.

Task

Average Cost per Week

Analysis and Design

$9,280

Construction

$5,114

Implementation

$3,234

Assuming the discount rate of 6% over the next five years of the project, create a five-year economic feasibility report by year. Include the following in your report:

1. Prepareatablethatindicatesyearbyyearcomputationsforbenefitsandcostsincludingthe initial costs in the form as shown below:

Details

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Economic Benefits

HR Benefits

Inventory related benefits

Handling costs related benefits

Total economic benefits

Initial costs

Recurring costs

Operations

General maintenance

Total recurring costs

  1. Compute Net Present Value, Annual Accounting Return on Investment, and Pay Back Period for this project. You need to show all calculations to get full credit for this question. Use the Excel format that we used in the class for practice exercises and homework assignments. Show your calculations how you arrived at each of these three financial indicators.

  2. Based on the values of these three financial indicators, justify whether this project is economically feasible.

Q2. You work for Scrooge and Marley Systems Developers, Inc. You have been given the task of preparing a Network chart for a new project to commence April 2013. You are to ignore holidays (company policy). The table below shows the tasks, durations, and dependencies required for the project.

Task ID

Task

Depend ency

Duration (weeks)

Early Start

Late Start

Slack

A

Gather requirements

None

3

B

Design screens

A

1

C

Translate old physical design to old logical design

A

0.5

D

Design new logical

C

3

E

Code screens

B

1

F

Inventory legacy equipment

B

1

G

Design new physical

D,E,F

1

H

Build system

F

4

I

Acquire new equipment

F

2

J

Implement system

H,I

1

The expected durations have already been calculated for you. You have to show all calculations. Simply

writing

the value will not get you full credit.

  1. DrawaPERTchartforabovetasks.YoucansubmitMS-ProjectfileshowingthePERTchart.

  2. Identifythecriticalpathfortheproject.Youhavetoidentifyitbylistingallpossiblepaths.

    You are not expected to use MS-Project to identify the critical path.

  3. Compute when the project will be completed (in weeks).

  4. ComputeEarlyStartandLateStartforeachactivity.Computetheslackforeachactivity.Show

    all calculations.

  5. IfweincreasethedurationofactivityEto3weeksfromthecurrent1weekandincreasethe

    duration of activity H to 7 weeks instead of 4 weeks, compute how much the project will be delayed?

Finally fill in the answers for part c in the last three columns of the above table. You still need to show the calculations for part c separately. 

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