CBA Laboratory Exercise
The new proposed automated cashiering and inventory system of G-Mall requires php 500,000 development cost. The determined economic life of the new system will be 5 years. Once the development is finished, the company will need to spend php 100, 000 for the employees training. The personnel salaries are estimated to php 500,000 per annum. The software lease (including license fee) will cost php100, 000 per year. In-house maintenance during operation will incur php 50,000.
G-mall still has old unused PC’s that can be used instead of buying brand new that will save them php 60, 000. It is expected that employees will be reduced by 50% thus saving php 500, 000 from personnel salaries and fringe benefits. Supplies and utilities will decrease saving php 36, 000.
All estimates of costs and benefits are increasing at a rate of 5% per year for both the current and new systems. The required rate of return for the company is 10%.
Instructions:
Use excel program in making your cost and analysis. Save your file as Lastname_CBA.xls. Your answers will be checked after 1 hour. Upload you xls file in yahoo groups.
1. Considering the scenario given identify and get the total of the following:
Costs
Non Recurring Cost
Recurring Cost
Benefits
Non Recurring Benefits
Recurring Benefits
* Use Sheet1 in excel for your table.
The new proposed automated cashiering and inventory system of G-Mall requires php 500,000 development cost. The determined economic life of the new system will be 5 years. Once the development is finished, the company will need to spend php 100, 000 for the employees training. The personnel salaries are estimated to php 500,000 per annum. The software lease (including license fee) will cost php100, 000 per year. In-house maintenance during operation will incur php 50,000.
G-mall still has old unused PC’s that can be used instead of buying brand new that will save them php 60, 000. It is expected that employees will be reduced by 50% thus saving php 500, 000 from personnel salaries and fringe benefits. Supplies and utilities will decrease saving php 36, 000.
All estimates of costs and benefits are increasing at a rate of 5% per year for both the current and new systems. The required rate of return for the company is 10%.
Instructions:
Use excel program in making your cost and analysis. Save your file as Lastname_CBA.xls. Your answers will be checked after 1 hour. Upload you xls file in yahoo groups.
1. Considering the scenario given identify and get the total of the following:
Costs
Non Recurring Cost
Recurring Cost
Benefits
Non Recurring Benefits
Recurring Benefits
* Use Sheet1 in excel for your table.
2. Make the cost and benefit analysis in Sheet2 of the same excel file.Make a formula for Payback Period and Five year investment return.
*Write your answers in book2 for the questions below:
3. How many years/days will it take for G-mall to have their investment returned?
4. How many percent will be their increase in income within five years?
3. How many years/days will it take for G-mall to have their investment returned?
4. How many percent will be their increase in income within five years?
5. Does the proposed automated cashiering and inventory system of G-mall economically feasible. Why?
Sample Output:
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