Tutorial - Cost Benefit Calculations Page 3

Tutorial - Cost/Benefit Calculations - Week 5

Hotel Example: ROI Analysis

Benefits

The benefits of the new system are equal to the costs of the old system, as the new

system will correct all billing errors and eliminate the time needed to do manual

updates.

Expansion in Year Two

As the system is designed to be (or purchased to be) completely expandable, there

are no extra costs incurred during the Hotel expansion in year 2.

Using this information now calculate:

1. Net Present Value

2. Payback Period

3. ROI

pg. 5

0 votes

Parent category: Business