Develop an economic feasibility analysis, using payback analysis, ROI, and present value (assume a discount rate of 10%).
What will be an ideal response?
Answers will vary, depending on how students interpret the Background statement of the textbook. Sample solutions follow. The first step is to prepare a cost-benefit summary with data from the table shown above. Students can refer to the table in Part C of the Systems Analyst’s Toolkit to determine the 10 percent discount rate.
The sample cost-benefit summary was created using Microsoft Excel. Again, the numbers themselves are not the critical issue – the main goal is for students to grasp the methodology.
A more detailed breakdown follows, with data values assigned for both options. If time is an issue, the instructor might choose to begin at this point, and use the figure as a “standard” starting point.
Payback analysis follows:
ROI analysis follows:
NPV analysis follows:
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