Information systems analysis and design UE Past Papers Questions.


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(6783) Question Category: Long answers

The spreadsheet below shows the calculation of the discounted present value for projected investment in an information system that is to be operational in 2020 and expected to be running for three years until 2024 before any overhaul would be needed. Is this reasonable investment? Explain why it is or Why it is not, and show your calculations.

 

Year 2020 2021 2021 2023 2024
Initial Outlay $50,000        
Annual Benefits   $20,000 $20,000 $20,000 $20,000
Discounted Factor   0.943 0.890 0.840 0.792
Discounted Present Value   $18,868 $17,800 $16792 $15,842
Cumulative DPV   $18,868 $36,668 $53,460 $69,302
           

 

Answer / Solution

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