Spruce Bank Is Planning to Automate Some of Its Back

question 44

Multiple Choice

Spruce Bank is planning to automate some of its back office functions and reduce operating costs.The installation of new computers and software will require an initial investment of $1,000,000.The savings generated because of reduced personnel cost is $200,000 per year.The bank uses an 8 percent rate of discount to evaluate cost saving projects which are expected to last 10 years. The maximum cost savings that can be generated with this new equipment has been estimated to be $264,237.In order to accept this project, what is the minimum number of years the projected savings must be realized before the project breaks even?

• A)3.7 years.
• B)4.7 years.
• C)5.7 years.
• D)6.7 years.
• E)7.7 years.

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Definitions:

Vroom-Jago Leadership Model

A contingency model that helps leaders determine the appropriate level of employee participation when making decisions.

Junior Executives

Lower-level managerial employees who are responsible for assisting in the planning, direction, and coordination activities within organizations.

Ethics Competency

The capability to identify, assess, and act upon ethical dilemmas and issues according to moral principles in professional settings.

Survival of the Bank

Strategies and measures adopted by a financial institution to continue its operations and remain solvent during challenging times.