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

question 51

Multiple Choice

Perform a cost-benefit analysis with payback period calculation using the following data: Direct Costs
• 12 laptops-$1,400/each
• A server-$2,000
• Network installation-$14,000
• Software-$20,000
Indirect Costs
• Training-$15,000
Annualized Benefits
• Increased capacity-$200,000

• A) Total costs are $37,400 with a payback period of 0.19 years.
• B) Total costs are $37,400 with a payback period of 0.21 years.
• C) Total costs are $52,400 with a payback period of 0.25 years.
• D) Total costs are $52,800 with a payback period of 0.26 years.
• E) Total costs are $67,800 with a payback period of 0.34 years.

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Definitions:

Useful Life

The estimated period over which an asset is expected to be usable for its intended purpose.

Depreciation

The method of spreading the expense of a physical asset across its lifespan, demonstrating the decline in its value as time progresses.

Asset

Economic resources owned by a business or individual, expected to provide future benefits or value.

Provide Services

The act of performing tasks or duties for clients or customers, often in exchange for payment, that does not result in the production of physical goods.