Discussion Post
Reflect on the assigned readings and then type a two page paper regarding what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding. Define and describe what you thought was worthy of your understanding in half a page, and then explain why you felt it was important, how you will use it, and/or how important it is in project planning.
Problem: Software project decision point.
• You need to determine an interest rate to use-select an interest rate and explain why you think this number should be used. Use it in your calculations in item 1.2.
• Given the information below on options 1 and 2, carry out three forms of analysis: breakeven, ROI, and NPV.
• Make a recommendation on which way to proceed, based on the TCO for each option.
I. Option I: Purchase the FunSoft package: Cost $200,000 for software and $85,000 for hardware in year one; with $50,000 to customize it and a $40,000 annual licensing fee for the life of the contract. There will be an annual saving of $61,000 due to the layoff of a clerk.
II. Option II: Purchase the SoftComm package, which will operate on the vendor's hardware: Cost $250,000 for a five-year license, payable half up front and half during the first year of implementation. The maintenance contract, at $75,000 a year, includes all currently identified modifications to the software for the first three years. The clerk's hours will be cut by half, for a saving of $25,000 a year.
In both cases, sales are expected to increase from the current $1 million a year, by 10% per year each year (over each year's previous year's sales) after full implementation.
The response must include a reference list. Using one-inch margins, double-space, Times New Roman 12 pnt font and APA style of writing and citations.