Follow Jesse’s e-mail instructions about calculating payback, ROI, and NPV for the TIMS system.

What will be an ideal response?

Instructor note: The SCR e-mail instructions [SCR_Inbox_7-2] will assign the following tasks regarding the in-house development option for TIMS:

(a) Visit the SCR Data Library and review the questionnaire summary and cost-benefit summary;

(b) Organize this data into a spreadsheet with columns for years 0, 1, 2, and 3, and rows for the items. Be sure to group developmental costs, operational costs, and revenues separately;

(c) Use the spreadsheet data to calculate payback, ROI, and NPV for the TIMS project.



For tasks (a) and (b), students can the questionnaire results (SCR_DataLibrary_4) and the information in the cost-benefit summary (SCR_DataLibrary_5), to create the following three-year worksheet:





(c) Using the worksheet data, a sample solution for payback analysis follows:







Using the worksheet data, a sample solution for NPV follows: