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207973077.xlsx.

ms_office

LCA

1/31/2014

7-Year Economic Evaluation of PBX Alternatives


Pre-Tax Analysis; Includes Inflation Allowance
Uses "Standard Economic Model" Format & Assumptions
Only the cells highlighted in yellow require student input.
Description
Product Costs:
PBX
Voice Mail
Spares
Installation
Software
Shipping
Trunk Installation
Training
Total Installed Cost

Purchase

Annual Costs:
Lease
Maintenance
Moves, Adds, Changes
Trunk Costs
Annual Software Upgrades
Floor Space (Sq. Ft.)
Floor Space Costs
Power & Air Cond (KW/Hr)
Power & Air Cond Costs
Depreciation (Straight Line)
Salvage Value

Purchase
$0
($35,500)
($5,580)
($24,000)
($500)
325
($33)
1.20
($1,682)
($71,496)
($39,720)

($340,300)
($33,700)
($2,450)
($10,500)
($10,250)
$0
$0
$0
($397,200)

Lease
$0
$0
$0
$0
$0
$0
$0
$0
$0
Lease
($53,000)
$0
($5,580)
($24,000)
$0
325
($33)
1.20
($11,038)
$0
$0

Common Cost Data


Inflation%
Annual Inflation Factor
Power $/KWHr
Cost of Money
Depreciation Period (Years)
Salvage%
Floor Space$ ($/yr/sq ft)

Item
5%
105%
$0.16
7%
5
10%
$24.00

Affects all costs except Le

Any number in parantheses represents a cost or negative cash flow. Enter them
Numbers not in parantheses are benefits or positive cash flow. Enter them as po

Floor Space (Sq. Ft) * Floor Space Cost ($)


Assume 24 hours a day, 365 days a year - 24 * 365 * KW/Hr * $/KWHr
(Total Installed Cost - Salvage Value)/Depreciation Period (Years)
Salvage% * Total Installed Cost

Page 1 of 2

207973077.xlsx.ms_office

LCA

1/31/2014

7-Year Economic Evaluation of PBX Alternatives


Pre-Tax Analysis; Includes Inflation Allowance
Uses "Standard Economic Model" Format & Assumptions
Description
Purchase Operating Costs
Maintenance
Moves, Adds, Changes
Trunk Costs
Software (1)
Floor Space
Power & Air Conditioning
Depreciation
Salvage
Annual Operating Costs
Chart PV Factors
PV Operating Costs
Purchase Initial Cost
Total PV Operating Cost
TOTAL LCA COST

Year 0
($35,500)
($5,580)
($24,000)
($500)
($7,800)
($1,682)
$71,496
$0
($3,566)
1.0000
($3,566)

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

($37,275)
($5,859)
($25,200)
($500)
($8,190)
($1,766)
$71,496

($39,139)
($6,152)
($26,460)
($500)
($8,600)
($1,854)
$71,496

($41,096)
($6,460)
($27,783)
($500)
($9,029)
($1,947)
$71,496

($43,150)
($6,783)
($29,172)
($500)
($9,481)
($2,044)
$71,496

($45,308)
($7,122)
($30,631)
($500)
($9,955)
($2,147)

($47,573)
($7,478)
($32,162)
($500)
($10,453)
($2,254)

($7,294)
0.9346
($6,817)

($11,209)
0.8734
($9,790)

($15,319)
0.8163
($12,505)

($19,634)
0.7629
($14,979)

($95,662)
0.7130
($68,206)

$39,720
($60,700)
0.6663
($40,447)

Year 2

Year 3

Year 4

Year 5

Year 6

($53,000)
$0
($6,152)
($26,460)
$0
($8,600)
($1,854)
$0
$0
($96,066)
0.8734
($83,908)

($53,000)
$0
($6,460)
($27,783)
$0
($9,029)
($1,947)
$0
$0
($98,219)
0.8163
($80,176)

Total
($253,541)
($39,852)
($171,408)
($3,000)
($55,708)
($12,012)
$285,984
$39,720
($213,384)
($156,309)

($397,200)
($156,309)
($553,509)

(1) A Fixed-Term contract was signed.

Description
Lease Operating Costs
Lease Costs
Maintenance
Moves, Adds, Changes
Trunk Costs
Software
Floor Space
Power & Air Conditioning
Depreciation
Salvage
Annual Operating Costs
Chart PV Factors
PV Operating Costs
Lease Initial Cost
Total PV Operating Cost
TOTAL LCA COST

Year 0
($53,000)
$0
($5,580)
($24,000)
$0
($7,800)
($1,682)
$0
$0
($92,062)
1.0000
($92,062)

Year 1
($53,000)
$0
($5,859)
($25,200)
$0
($8,190)
($1,766)
$0
$0
($94,015)
0.9346
($87,865)

$0
($564,196)
($564,196)

Purchase vs. Lease Cost Comparison


Description
Purchase
Initial Costs
($397,200)
Total PV Operating Cost
($156,309)
TOTAL LCA COST
($553,509)

Lease
$0
($564,196)
($564,196)

Diff$
($397,200)
$407,887
$10,687

Page 2 of 2

Diff%
100%
-261%
-1.9%

($53,000)
$0
($6,783)
($29,172)
$0
($9,481)
($2,044)
$0
$0
($100,480)
0.7629
($76,656)

($53,000)
$0
($7,122)
($30,631)
$0
($9,955)
($2,147)
$0
$0
($102,854)
0.7130
($73,333)

($53,000)
$0
($7,478)
($32,162)
$0
($10,453)
($2,254)
$0
$0
($105,347)
0.6663
($70,197)

Total
($318,000)
$0
($39,852)
($171,408)
$0
($55,708)
($12,012)
$0
$0
($596,981)
($564,196)

207973077.xlsx.ms_office

LCA

1/31/2014

7-Year Economic Evaluation of PBX Alternatives


Pre-Tax Analysis; Includes Inflation Allowance
Uses "Standard Economic Model" Format & Assumptions

105
1681.

Page 3 of 2

207973077.xlsx.ms_office

LCA

Affects all costs except Lease Costs and Software Upgrades

ative cash flow. Enter them as negative numbers in the tables below.
cash flow. Enter them as positive numbers in the tables below.

-71496

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1/31/2014

207973077.xlsx.ms_office

LCA

87413
Use the PV Factor Chart to find the Factor for each year
at the given cost of money. The factor for Year 0 is always 1.

Use the PV Factor Chart to find the Factor for each year
at the given cost of money. The factor for Year 0 is always 1.

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1/31/2014

207973077.xlsx.ms_office

LCA

10512
1681.92

Page 6 of 2

1/31/2014

207973077.xlsx.ms_office

PV Factors

1/31/2014

Present Value Of $1
Present Value (PV) Factors, a.k.a. Discounted Cash Flow (DCF) Factors
Years
1%
3%
4%
5%
6%
7%
8%
1
0.9901
0.9709
0.9615
0.9524
0.9434
0.9346
0.9259
2
0.9803
0.9426
0.9246
0.9070
0.8900
0.8734
0.8573
3
0.9706
0.9151
0.8890
0.8638
0.8396
0.8163
0.7938
4
0.9610
0.8885
0.8548
0.8227
0.7921
0.7629
0.7350
5
0.9515
0.8626
0.8219
0.7835
0.7473
0.7130
0.6806
6
0.9420
0.8375
0.7903
0.7462
0.7050
0.6663
0.6302
7
0.9327
0.8131
0.7599
0.7107
0.6651
0.6227
0.5835
8
0.9235
0.7894
0.7307
0.6768
0.6274
0.5820
0.5403
9
0.9143
0.7664
0.7026
0.6446
0.5919
0.5439
0.5002
10
0.9053
0.7441
0.6756
0.6139
0.5584
0.5083
0.4632

9%
0.9174
0.8417
0.7722
0.7084
0.6499
0.5963
0.5470
0.5019
0.4604
0.4224

10%
0.9091
0.8264
0.7513
0.6830
0.6209
0.5645
0.5132
0.4665
0.4241
0.3855

11%
0.9009
0.8116
0.7312
0.6587
0.5935
0.5346
0.4817
0.4339
0.3909
0.3522

12%
0.8929
0.7972
0.7118
0.6355
0.5674
0.5066
0.4523
0.4039
0.3606
0.3220

13%
0.8850
0.7831
0.6931
0.6133
0.5428
0.4803
0.4251
0.3762
0.3329
0.2946

14%
0.8772
0.7695
0.6750
0.5921
0.5194
0.4556
0.3996
0.3506
0.3075
0.2697

This table shows the present value (PV) of $1 received at a future time (FV). To use the table, select the interest rate from the top row and read
down the column to the appropriate number of years. The PV Factor is the intersection of the Year Row and Interest Rate Column,
e.g. the NPV of $1 received 10 years in the future discounted at 10% = $0.3855, i.e. FV = $1, NPV = $0.3855

Excel Function: NPV(interest, value1, value2, ...)


where Value1 = FV of Year 1, Value2 = Future Value of Year 2, etc.
e.g., NPV of $1 in Year 7 @ 7%; = NPV(.07,0,0,0,0,0,0,1) =
$0.6227)
e.g., @ i = 12%, FV1 = 235; FV2 = 250, FV3 =679: NPV(.12,235,250,679) =

$892.42

Page 7

15%
0.8696
0.7561
0.6575
0.5718
0.4972
0.4323
0.3759
0.3269
0.2843
0.2472

18%
0.8475
0.7182
0.6086
0.5158
0.4371
0.3704
0.3139
0.2660
0.2255
0.1911

207973077.xlsx.ms_office

PV Factors

20%
0.8333
0.6944
0.5787
0.4823
0.4019
0.3349
0.2791
0.2326
0.1938
0.1615

Page 8

1/31/2014

Only the cells highlighted in yellow require student input.


Description

Purchase

Lease

Common Cost Data

Product Costs:
PBX

Item

Inflation%

0.05

-340300

Annual Inflation Factor

1.05

-33700

Power $/KWHr

0.16

-2450

Cost of Money

0.07

Installation

-10500

Depreciation Period (Years)

Software

-10250

Salvage%

0.1

Shipping

Floor Space$ ($/yr/sq ft)

24

Trunk Installation

Training

-397200

Voice Mail
Spares

Total Installed Cost

Any number in parantheses represents a cost or negative cash flow. Enter them as
Annual Costs:

Purchase

Lease
Maintenance

-5580

-5580

-24000

-24000

Annual Software Upgrades


Floor Space (Sq. Ft.)
Floor Space Costs

-500

325

325

-32.5

Power & Air Cond (KW/Hr)


Power & Air Cond Costs

Numbers not in parantheses are benefits or positive cash flow. Enter them as positiv
-53000

-35500

Moves, Adds, Changes


Trunk Costs

Lease

-32.5 Floor Space (Sq. Ft) * Floor Space Cost ($)

1.2
-1681.92

1.2
-11037.6 Assume 24 hours a day, 365 days a year - 24 * 365 * KW/Hr * $/KWHr

Depreciation (Straight Line)

-71496

0 (Total Installed Cost - Salvage Value)/Depreciation Period (Years)

Salvage Value

-39720

0 Salvage% * Total Installed Cost


Year 6

Description

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

-47573.3952

Purchase Operating Costs


Maintenance

-7477.73367
-35500

Moves, Adds, Changes

-37275

-39138.75 -41095.6875 -43150.4719 -45307.9955 -32162.2954

-5580

-5859

-6151.95

Trunk Costs

-24000

-25200

-26460

-27783

Software (1)

-500

-500

-500

-500

Floor Space
Power & Air Conditioning

-7800

-8190

-1681.92

-1766.016

71496

71496

Depreciation
Salvage
Annual Operating Costs

Purchase Initial Cost

-29172.15 -30630.7575
-500

-500
-10452.746

-500 -2253.93366

-9029.475 -9480.94875 -9954.99619

-1854.3168 -1947.03264 -2044.38427 -2146.60349


71496

71496

71496

39720
-60700.1039

0.66634222

-3565.92

-7294.016 -11208.5168 -15318.7426 -19634.4798 -95662.0038 -40447.0423

Chart PV Factors
PV Operating Costs

-8599.5

-6459.5475 -6782.52488 -7121.65112

0.93457944

0.87343873

0.81629788

0.76289521

0.71298618

-3565.92 -6816.83738 -9789.95266 -12504.6571 -14979.0506 -68205.6866


-397200

Total PV Operating Cost

-156309.147

TOTAL LCA COST

-553509.147

(1) A Fixed-Term contract was signed.

Description

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Lease Operating Costs


Lease Costs

-53000

-53000

-53000

-53000

-53000

-53000

-53000

Maintenance

-5580

-5859

-6151.95

-24000

-25200

-26460

Moves, Adds, Changes


Trunk Costs

-6459.5475 -6782.52488 -7121.65112 -7477.73367


-27783

-29172.15 -30630.7575 -32162.2954

Software

Floor Space

-9029.475 -9480.94875 -9954.99619

-10452.746

-7800

-8190

-1681.92

-1766.016

Depreciation

Salvage

Power & Air Conditioning

Annual Operating Costs

-92061.92

Chart PV Factors
PV Operating Costs

-8599.5

-1854.3168 -1947.03264 -2044.38427 -2146.60349 -2253.93366

-94015.016 -96065.7668 -98219.0551 -100480.008 -102854.008 -105346.709


0.93457944

0.87343873

0.81629788

Lease Initial Cost

Total PV Operating Cost

-564196.152

TOTAL LCA COST

-564196.152

Purchase vs. Lease Cost Comparison


Description
Initial Costs

0.76289521

0.71298618

0.66634222

-92061.92 -87864.5009 -83907.5612 -80176.0062 -76655.7169 -73333.4864 -70196.9602

Purchase
-397200

Lease

Diff$
0

Diff%
-397200

Total PV Operating Cost

-156309.147 -564196.152

407887.005 -2.60948904

TOTAL LCA COST

-553509.147 -564196.152

10687.0052 -0.01930773

Affects all costs except Lease Costs and Software Upgrades

cost or negative cash flow. Enter them as negative numbers in the tables below.

or positive cash flow. Enter them as positive numbers in the tables below.

W/Hr * $/KWHr
-71496
Total
-253541.3
-39852.4072
-171408.203
-3000
-55707.6659
-12012.2869
285984
39720
-213383.783
87413
-156309.147
Use the PV Factor Chart to find the Factor for each year
at the given cost of money. The factor for Year 0 is always 1.

Total
-318000
0
-39852.4072
-171408.203

0
-55707.6659
-12012.2869
0
0
-596980.563
Use the PV Factor Chart to find the Factor for each year
-564196.152 at the given cost of money. The factor for Year 0 is always 1.