Purpose of Workbook

To analyze results of differential scenarios under which decision can be taken on weather a legacy sy
Summary of Workbook

Workbook created by
Last Modified Date:

Worksheet
Table of Contents
Costs
Benefit
Cost Benefit Analysis
Break Even Chart
Harrison Ngo
10/26/2014

Content
Descriptions of the Contents of the Workbook
List of implementation and maintenance cost
List of all recurring benefits
Contain calculations related to cost benefit analysis and economic feasability o
Contain break even chart for the project

n be taken on weather a legacy system can be replaced with a new SAP implementation.

nalysis and economic feasability of the project

Implementation Cost
Software Lincenses
Hardware
Network & Communication Upgrades
Training
Configuration & Implementation
Total Implementaion Cost

Dollar Amount
$500,000.00
$75,000.00
$25,000.00
$25,000.00
$2,750,000.00
$3,375,000.00

Maintenance Cost
Sofware License Maintanence Fees
New IT Employees (2 x 90,000)
Total Maintenance Cost

Dollar Amount
$80,000.00
$180,000.00
$260,000.00

Benefits
Increased Profits Due to Increased Sales
Reduced Inventory Holding Costs
Reduction in Clerical Workforce (4 x 55,000)
Total Benefits:

Dollar Amount
$750,000.00
$250,000.00
$220,000.00
$1,220,000.00

Discount Rate

15%
0

Cost
Implementation Cost
Maintenance Cost
Present Value Factor
Present Value of Costs

$3,375,000.00
$0.00
1
$3,375,000.00

$0.00
$0.00
$260,000.00 $260,000.00
0.869565217 0.75614367
$226,086.96 $196,597.35

Benefit
Recurring Benefits
Present Value Factor
Present Value of Benefits

$0.00 1,220,000.00 1,220,000.00

1 0.869565217 0.75614367
$0.00 $1,060,869.57 $922,495.27

Net Benefit (Costs)

$3,375,000.00

$834,782.61 $725,897.92

Overall Net Present Value

(Present Value of all Benefits Present Value of all Costs)

$3,375,000.00

2,540,217.39 1,814,319.47

$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$260,000.00 $260,000.00 $260,000.00 $260,000.00 $260,000.00 $260,000.00 $260,000.00
0.65751623 0.57175325 0.49717674
0.4323276 0.37593704 0.32690177 0.28426241
$170,954.22 $148,655.84 $129,265.95 $112,405.17 $97,743.63 $84,994.46 $73,908.23

1,220,000.00 1,220,000.00 1,220,000.00 1,220,000.00 1,220,000.00 1,220,000.00 1,220,000.00

0.65751623 0.57175325 0.49717674
0.4323276 0.37593704 0.32690177 0.28426241
$802,169.80 $697,538.96 $606,555.62 $527,439.67 $458,643.19 $398,820.16 $346,800.14
$631,215.58 $548,883.12 $477,289.67 $415,034.49 $360,899.56 $313,825.70 $272,891.92
1,183,103.89

634,220.77

156,931.11

258,103.39

619,002.94

932,828.65 1,205,720.56

10

11

12

13

14

15

16

$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$260,000.00 $260,000.00 $260,000.00 $260,000.00 $260,000.00 $260,000.00 $260,000.00
0.24718471 0.21494322 0.18690715 0.16252796 0.14132866 0.12289449 0.10686477
$64,268.02 $55,885.24 $48,595.86 $42,257.27 $36,745.45 $31,952.57 $27,784.84

1,220,000.00 1,220,000.00 1,220,000.00 1,220,000.00 1,220,000.00 1,220,000.00 1,220,000.00

0.24718471 0.21494322 0.18690715 0.16252796 0.14132866 0.12289449 0.10686477
$301,565.34 $262,230.73 $228,026.72 $198,284.11 $172,420.96 $149,931.27 $130,375.02
$237,297.32 $206,345.49 $179,430.86 $156,026.84 $135,675.51 $117,978.71 $102,590.18
1,443,017.88 1,649,363.37 1,828,794.24 1,984,821.08 2,120,496.59 2,238,475.29 2,341,065.47

17

18

19

$0.00
$260,000.00
0.09292589
$24,160.73

$0.00
260,000.00
0.080805119
$21,009.33

$0.00
260,000.00
0.070265321
$18,268.98

1,220,000.00 $1,220,000.00 $1,220,000.00

0.09292589 0.080805119 0.070265321
$113,369.58
$98,582.25
$85,723.69
$89,208.85

$77,572.91

$67,454.71

2,430,274.32

2,507,847.24

2,575,301.95

Years
Overall Net Present Value

0
1
2
3
$3,375,000.00 $2,540,217.39 $1,814,319.47 $1,183,103.89

$3,000,000.00

$2,000,000.00

$1,000,000.00

$258,103.39
$0.00
0

$156,931.11
6

4
$634,220.77

$1,000,000.00
$1,183,103.89
$1,814,319.47

$2,000,000.00

$2,540,217.39
$3,000,000.00
$3,375,000.00
$4,000,000.00

4
$634,220.77

5
6
7
8
9
10
$156,931.11 $258,103.39 $619,002.94 $932,828.65 $1,205,720.56 $1,443,017.88

Overall Net Present Value

$2,238,475.29
$2,120,496.59
$1,984,821.08
$1,828,794.24
$1,649,363.37
$1,443,017.88
$1,205,720.56
$932,828.65
$619,002.94
$258,103.39
$156,931.11
6

10

12

14

16

11
12
13
14
15
16
17
$1,649,363.37 $1,828,794.24 $1,984,821.08 $2,120,496.59 $2,238,475.29 $2,341,065.47 $2,430,274.32

$2,507,847.24$2,575,301.95
$2,341,065.47$2,430,274.32
$2,238,475.29

16

18

20

18
19
$2,507,847.24 $2,575,301.95