Created By Johnny Truong

Last Modifed: 03/18/2013

Purpose: To evaluate the feasibility of SSB implementing SAP

Table of Contents
Purpose/Description
One Time costs
Recurring Costs
Recurring Benefits
Economic Feasibility
Break Even Chart

One time cost of aquiring at implementing project at the beginning.

Cost every year that the system continues to be used.
Benefits SSB enjoys every year the system is used.
Worksheet comparing net overall benefits to net overall costs.
Chart showing the break even point where net benefits meet net costs.

Page
1
2
3
4
5

One-Time Costs
Software Licenses
Hardware
Network and Communications
Upgrades
Training
Configuration and
Implementation
Total One Time Costs

Dollar
Amount
$500,000
$75,000
$25,000
$25,000
$1,750,000
$2,375,000

Recurring Costs

Dollar
Amount

Software License Mainteance

Fees
New IT Employees (2X 80,000)

$160,000

Total Recurring Costs

$240,000

$80,000

Recurring Benefits
Increased Profit Due to
Increased Sales
Reduced Inventory
Holdings Costs
Reduction in Clerical
Workforce (4 x 50,000)
Total Recurring Benefits

Dollar
Amount
$750,000
$250,000
$200,000
$1,200,000

ECONOMIC FEASIBILTY
Discount Rate
Benefits
Recurring Value of Benefits
Present Value Factor
Present Value of Benefits
Net Present Value of All Benefits
Cost
One Time Costs
Recurring Costs
Present Value Factor
Present Value of Costs
Net Present Value of All Costs
Overall Net Present Value

15%
0
$0
1
$0
$0

1
$1,200,000
0.869565217
$1,043,478
$1,043,478

2
$1,200,000
0.756143667
$907,372
$1,950,851

3
$1,200,000
0.657516232
$789,019
$2,739,870

4
$1,200,000
0.571753246
$686,104
$3,425,974

5
$1,200,000
0.497176735
$596,612
$4,022,586

$2,375,000
$0
1
$2,375,000
$2,375,000

$0
$240,000
0.869565217
$208,696
$2,583,696

$0
$240,000
0.756143667
$181,474
$2,765,170

$0
$240,000
0.657516232
$157,804
$2,922,974

$0
$240,000
0.571753246
$137,221
$3,060,195

$0
$240,000
0.497176735
$119,322
$3,179,517

(2,375,000) $

(1,540,217) $

(814,319) $

(183,104) $

365,779 $

843,069 $

Total
$6,000,000
$4,022,586
$4,022,586

$2,375,000
$1,200,000
$3,179,517
$3,179,517
843,069

SSB SAP PROJECT BREAK EVEN CHART

$4,500,000
$4,000,000
$3,500,000

Dollar Amount

$3,000,000
$2,500,000
Net Present Value of All Benefits

$2,000,000

Net Present Value of All Costs

$1,500,000
$1,000,000
$500,000
$0
1

Years