Purpose of Workbook

To view different scenarios and decide if the new SAP should take place or not.
Summarry of Workbook Contents
Worksheet Name

Content

Documentation

This Worksheet contains a description of the contents of the workbook.

One-Time Cost

This worksheet contains a list of the one-time costs.

Recurring Cost

This woeksheet contains a list of the recurring costs.

Recrrung Benefits

This workseet contains a list of the reocurring benefits.

Economic Feasibility

All the listed benefits and costs, the net present value, cash flow, and IRR are c

Break-even Chart

Alper Miller

Prof. Adler

Student ID: 2021193900

e contents of the workbook.

ent value, cash flow, and IRR are calculated.

Implementation Costs
Software Licenses

Dollar amount
(500,000)

Hardware

(75,000)

Network and Communications Upgrades

(25,000)

Training

(25,000)

Configuration and Implementation

(2,750,000)

Total

(3,375,000)

Maintenance Costs
Software License Maintenance Fees

Dollar amount
(80000.00)

New IT Employees (2 x 80250)

(180000.00)

Total

(260000.00)

Recurring Benefits

Dollar Amounts

Increased Profit Cue to Increaed Sales

750,000

Reduction in Inventory Holding Costs

250,000

Reduction in Clerical Workforce (4 x 55,000)

220,000

Total

1220000

Discount Rate

15%
Years
0

Recurring Value of Benefits

1220000

1220000

Present Value Factor

0.8695652174

0.7561436673

Present Value of Benefits

0 1060869.5652174 922495.27410208

Benefits

Costs
Implementation Cost

(3,375,000)

Maintenance Cost

(260,000)

(260,000)

Present Value Factor

0.8695652174

0.7561436673

(3,375,000)

(226,087)

(196,597)

Present Value of Costs

Overall Net Present Value
Present Value of all benefits

0 1060869.5652174 1983364.8393195

Present Value of all Costs

(3,375,000)

(3,601,087)

(3,797,684)

Net Benefits (Cost)

(3,375,000)

(2,540,217)

(1,814,319)

1220000

1220000

1220000

1220000

1220000

0.6575162324

0.5717532456

0.4971767353

0.4323275959

0.3759370399

802169.80356703

697538.9596235 606555.61706391

527439.6670121 458643.18870617

(260,000)

(260,000)

(260,000)

(260,000)

(260,000)

0.6575162324

0.5717532456

0.4971767353

0.4323275959

0.3759370399

(170,954)

(148,656)

(129,266)

(112,405)

(97,744)

2785534.6428865

3483073.60251 4089629.2195739

4617068.886586 5075712.0752922

(3,968,639)

(4,117,294)

(4,246,560)

(4,358,966)

(4,456,709)

(1,183,104)

(634,221)

(156,931)

258,103

619,003

10

11

12

1220000

1220000

1220000

1220000

1220000

0.3269017738

0.284262412

0.2471847061

0.2149432227

0.1869071502

398820.16409233 346800.14268898 301565.34146868 262230.73171189 228026.72322773

(260,000)

(260,000)

(260,000)

(260,000)

(260,000)

0.3269017738

0.284262412

0.2471847061

0.2149432227

0.1869071502

(84,994)

(73,908)

(64,268)

(55,885)

(48,596)

5474532.2393845 5821332.3820735 6122897.7235422 6385128.4552541 6613155.1784818

(4,541,704)

(4,615,612)

(4,679,880)

(4,735,765)

(4,784,361)

932,829

1,205,721

1,443,018

1,649,363

1,828,794

13

14

15

16

17

1220000

1220000

1220000

1220000

1220000

0.1625279567

0.141328658

0.1228944852

0.1068647697

0.0929258867

198284.10715455 172420.96274309 149931.27195051

130375.0190874 113369.58181513

(260,000)

(260,000)

(260,000)

(260,000)

(260,000)

0.1625279567

0.141328658

0.1228944852

0.1068647697

0.0929258867

(42,257)

(36,745)

(31,953)

(27,785)

(24,161)

6811439.2856363 6983860.2483794 7133791.5203299 7264166.5394173 7377536.1212325

(4,826,618)

(4,863,364)

(4,895,316)

(4,923,101)

(4,947,262)

1,984,821

2,120,497

2,238,475

2,341,065

2,430,274

18

19

20

1220000

1220000

1220000

0.0808051189

0.0702653208

0.0611002789

98582.245056636 85723.691353596 74542.340307475

(260,000)

(260,000)

(260,000)

0.0808051189

0.0702653208

0.0611002789

(21,009)

(18,269)

(15,886)

7476118.3662891 7561842.0576427 7636384.3979502

(4,968,271)

(4,986,540)

(5,002,426)

2,507,847

2,575,302

2,633,958

Overall Net Present Value

3,000,000

2,000,000

1,000,000

0
1
(1,000,000)

(2,000,000)

(3,000,000)

(4,000,000)

10 11 12 13 14 15 16 17 18 19

l Net Present Value

Overall Net Present Value

11 12 13 14 15 16 17 18 19 20 21