Tangible Benefits

Category In $US
Cost reduction or avoidance $ 4,500.00
Error reduction $ 2,500.00
Increased flexibility $ 7,500.00
Increased speed of activity $ 10,500.00
Improvement in management planning and
control $ 25,000.00
Other $ -
Total Tangible Benefits $ 50,000.00

Tangible One-Time Costs

Category In $US
Development costs $ 20,000.00
New hardware $ 15,000.00
New software $ 5,000.00
User training $ 2,500.00
Site preparation $ -
Other $ -
Total Tangible One-Time Costs $ 42,500.00

Tangible Recurring Costs

Category In $US
Application software maintenance $ 25,000.00
Incremental data storage required $ 1,000.00
Incremental communications $ 2,000.00
New software or hardware leases $ -
Supplies $ 500.00
Other $ -
Total Tangible Recurring Costs $ 28,500.00
 Break Even Analysis
Costs of Existing System Year 1 Year 2 Year 3 Year 4 Year 5
Development costs $ - $ - $ - $ - $ -
Additional hardware $ 3 $ 8 $ 8 $ 3 $ -
Operation costs $ 10 $ 20 $ 60 $ 95 $ 145
User time during development $ - $ - $ - $ - $ -
Maintenance costs $ 5 $ 8 $ 12 $ 18 $ 23
Total Cost of Existing System $ 18 $ 36 $ 80 $ 116 $ 168
Costs of Proposed System Year 1 Year 2 Year 3 Year 4 Year 5
Development costs $ 130 $ - $ - $ - $ -
Additional hardware $ 5 $ 8 $ 8 $ 3 $ -
Operation costs $ 10 $ 20 $ 30 $ 40 $ 50
User time during development $ 10 $ - $ - $ - $ -
Maintenance costs $ - $ 15 $ 4 $ 4 $ 4
Total Cost of Proposed System $ 155 $ 43 $ 42 $ 47 $ 54
$ US

$180 Break Even Analysis

$160
$140
$120
$100
Total Cost
of $80
Existing
$60
System

$40
Total Cost
of $20
Proposed
$-
System Year
1 2 3 4 5
 Payback Analysis (System Name)
Benefits of option Year 1 Year 2 Year 3 Year 4 Year 5
Staff savings $ 30 $ 55 $ 60 $ 65 $ 70
Improved buying practice $ 20 $ 40 $ 40 $ 45 $ 45
Improved service $ 5 $ 15 $ 15 $ 20 $ 40
Total Benefits $ 55 $ 110 $ 115 $ 130 $ 155
Costs of option Year 1 Year 2 Year 3 Year 4 Year 5
Development costs $ 130 $ - $ - $ - $ -
Additional hardware $ 5 $ 8 $ 8 $ 3 $ -
Operation costs $ 10 $ 20 $ 20 $ 20 $ 20
User time during development $ 10 $ - $ - $ - $ -
Maintenance costs $ - $ 8 $ 4 $ 4 $ 4
Total Costs $ 155 $ 36 $ 32 $ 27 $ 24
Net benefits/costs $ (100) $ 74 $ 83 $ 103 $ 131
Cumulative benefits/costs $ (100) $ (26) $ 57 $ 160 $ 291
Break Even Period 2.313253

$300

$250 Payback Analysis

$200

$150

$100

$50
Net
$- benefits/costs

$(50)
Cumulative
benefits/costs
$(100)
1
2
3
4
Year 5
 Cost Benefit Analysis using Present Value (Purchasing Operations Support)
Benefits of option Year 1 Year 2 Year 3 Year 4 Year 5
Staff savings $ 30 $ 55 $ 60 $ 65 $ 70
Improved buying practice $ 20 $ 40 $ 40 $ 45 $ 45
Improved service $ 5 $ 15 $ 15 $ 20 $ 40
Total Benefits $ 55 $ 110 $ 115 $ 130 $ 155
Costs of option Year 1 Year 2 Year 3 Year 4 Year 5
Development costs $ 130 $ - $ - $ - $ -
Additional hardware $ 5 $ 8 $ 8 $ 3 $ -
Operation costs $ 10 $ 20 $ 20 $ 20 $ 20
User time during development $ 10 $ - $ - $ - $ -
Maintenance costs $ - $ 8 $ 4 $ 4 $ 4
Total Costs $ 155 $ 36 $ 32 $ 27 $ 24
Net benefits/costs $ (100) $ 74 $ 83 $ 103 $ 131
Cumulative benefits/costs $ (100) $ (26) $ 57 $ 160 $ 291
Net benefits/cost (NPV @ 5%) ($95.24) $67.12 $71.70 $84.74 $102.64
Cumulative NPV ($95.24) ($28.12) $43.58 $128.32 $230.96

$250.00
Net benefits /cost (NPV @ 5%)
$200.00Cumulative NPV
$150.00
$100.00
$50.00
$0.00
($50.00)
($100.00)

Year 4 Year 5
Year 2 Year 3
Year 1

Break Even Period 2.39219

 Economic Feasibility Analysis - Customer Tracking System Project
Cost Benefit Analysis using Present Value
YEAR OF PROJECT >>> 0 1 2 3
Net economic benefit $ - $ 50,000 $ 50,000 $ 50,000
Discount rate (12%) 1 0.892857143 0.797193878 0.7117802478
PV of Benefits $ - $ 44,643 $ 39,860 $ 35,589
NPV of all BENEFITS $ - $ 44,643 $ 84,503 $ 120,092

One-time COSTS $(42,000.00)

Recurring Costs $ - $(28,500.00) $(28,500.00) $ (28,500.00)
Discount rate (12%) 1 0.892857143 0.797193878 0.7117802478
PV of Benefits $(42,000.00) $(25,446.43) $(22,720.03) $ (20,285.74)
NPV of all COSTS $(42,000.00) $(67,446.43) $(90,166.45) $ (110,452.19)

Cummulative Difference (42,000.00) (22,803.57) (5,663.90) 9,639.37

ng System Project
t Value
4 5 Totals
$ 50,000 ###
0.6355180784 0.5674268557
$ 31,776 $ 28,371
$ 151,867 $ 180,239 $ 180,239

$ (28,500.00) ###
0.6355180784 0.5674268557
$ (18,112.27) $ (16,171.67)
$ (128,564.46) $ (144,736.12) $ (144,736.12)

23,303.01 35,502.69