Perform a Cost-Benefit Analysis with Payback Period Calculation Using the Following

question 14

Multiple Choice

Perform a cost-benefit analysis with payback period calculation using the following data: Direct Costs
• 15 laptops-$1,850/each
• A server-$2,100
• Network installation-$16,500
• Software-$22,500
Indirect Costs
• Training-$10,000
Annualized Benefits
• Increased capacity-$250,000

• A) Total costs are $52,950 with a payback period of 0.21 years.
• B) Total costs are $52,950 with a payback period of 0.32 years.
• C) Total costs are $108,250 with a payback period of 0.43 years.
• D) Total costs are $78,850 with a payback period of 0.32 years.
• E) Total costs are $78,850 with a payback period of 0.43 years.

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Definitions:

Growth Rate

The rate at which a company's sales, earnings, dividends, or other key metrics increase over a particular period of time.

Market Return

The total gain or loss experienced by investors from holding a market portfolio over a specific period.

Contractual Commitments

Agreements that are documented in a contract requiring a party to do or not do certain things.

Bond Cash Flows

The series of cash payments to the bondholder throughout the life of the bond, typically consisting of periodic interest payments and the return of principal at maturity.