Ask a New Question
Menu

ROI & NPV: wireless order-tracking system

I need to identify the ROI and NPV of the wireless order-tracking system.

Here is the information I have been given:
- The acquisition cost is $35,000 paid at the time of installation.
- It reduces the wait staff by one person: Figure $10 per hour, or 2020 hours per year + 18%

Benefits:
- Money costs are 7%
- The system may become obsolete in three years

2 answers

PV (present value) of first year salary
=2020*10*1.18
=$23836

PV of second year salary
=23836/1.07
=22276.64

PV of third year salary
=23836/1.07²
=20819.29

NPV (net present value)
= sum of PV - present cost
= 66931.93 -35000
=31931.93
ROI (return of investment)
=(gain-cost)/cost
=31931.93/35000
=91.2%

Check my numbers and definitions.
Identify the ROI and NPV of the wireless order-taking system. ...