Turn to Part C of the Systems Analyst's Toolkit and review the concept of net present value (NPV).
Determine the NPV for the following:
An information system will cost $95,000 to implement over a one-year period and will produce no savings during that year. When the system goes online, the company will save $30,000 during the first year of operation. For the next four years, the savings will be $20,000 per year.
Assuming a 12% discount rate, what is the NPV of the system?
Write a response of approximately 300 words summarizing how you derived at your answer