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    • Introduction
    • Online Module One
      • Module One Videos
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        • WA-1.1: Written Assignment 1
    • Online Module Two
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      • Module Two Assignments
        • PA-2.1: Practical Assignment 2
        • WA-2.1: Written Assignment 2
        • PA-3.1: Practical Assignment 3
        • WA-3.1: Written Assignment 3
        • WA-4.1: Written Assignment 4
    • Day One
      • 3/19 AM – Requirements
      • 3/19 PM – Requirements
    • Day Two
      • 3/20 AM – Structured Process Analysis
      • 3/20 PM – Data Analysis
    • Day Three
      • 3/21 AM – Data Modeling
      • 3/21 PM – OO Process Analysis
    • Day Four
      • 3/22 AM – Databases
      • 3/22 PM – Human Factors
    • Day Five
      • 3/23 AM – Implementation & Distributed Systems
      • 3/23 PM – Wrap-Up

Systems and Infrastructure Life Cycle Management

MIS5203

Fox School of Business

PA-3.1: Practical Assignment 3

Follow the instructions in the project feasibility demonstration (using this spread sheet: CalculateProjectNPV) to complete all three scenarios:

Scenario One:

  • Assume you are put in charge of launching a new website for a local nonprofit organization. What costs would you need to account for? Make a list of expected costs and benefits for the project. You don’t need to list values, just sources of expense. Consider both one-time and recurring costs.
  • Consider the situation you addressed in the previous question. Create numeric cost estimates for each of the costs you listed. Calculate the net present value and return on investment. Include a break-even analysis. Assume a 10 percent discount rate and a five-year time horizon.

Scenario Two:

Assuming monetary benefits of an information system at $85,000 per year, one-time costs of $75,000, recurring costs of $35,000 per year, a discount rate of 12 percent, and a five-year time horizon, calculate the net present value of these costs and benefits of an information system. Also calculate the overall return on investment of the project and then present a break-even analysis. At what point does break-even occur?

Scenario Three:

Assume monetary benefits of an information system of $40,000 the first year and increasing benefits of $10,000 a year for the next five years (year 1 = $50,000, year 2 = $60,000, year 3 = $70,000, year 4 = $80,000, year 5 = $90,000). One-time development costs were $80,000 and recurring costs were $45,000 over the duration of the system’s life. The discount rate for the company was 11 percent. Using a six-year time horizon, calculate the net present value of these costs and benefits. Also calculate the overall return on investment and then present a break-even analysis. At what point does break-even occur?

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