For visual basic
Most techniques used to determine economic feasibility encompass the concept of the time value of money (TVM) and break-even analysis (BEA).
The time value of money (TVM) refers to the concept of comparing present cash outlays to future expected returns.
A dollar today is worth more than a dollar one year from today because money can be invested.
The rate at which money can be borrowed or invested is called the cost of capital and is called the discount rate for TVM calculations.
Create a visual basic form to do the following TVM and BEA calculations.
The end user should be able to enter the following five values:
Annual tangible benefits
Annual or Recurring costs
Onetime costs
Discount Rate
If you don't wish to do the bonus, then base all your calculation for only 5 years.
Calculate the Present Value of Money by using the following formula: PVn=Y*[1/(1+i)n] where "Y" is the amount and "i" is the discount rate and "n" is number of years from 0 to n.
For example, the present value of $4,500.00 for the three payments of $1,500.00 and 10 percent discount rate, can be calculated as:
PV1=1500*[1/(1+.10)1] = 1500 * 0.9091 = 1,363.65
PV2=1500*[1/(1+.10)2] = 1500 * 0.8264 = 1,239.60
PV3=1500*[1/(1+.10)3] = 1500 * 0.7513 = 1,126.95
$3,730.20 Value of $4,500.00 today rather than $1,500.00 per year for three years.
Your program should do the following calculations:
(Present Value) PV of benefits: By multiplying the related discount rate by the Net economic benefits
(Present Value) PV of Recurring Costs: By multiplying the related discount rate by the Recurring Costs
(Net Present Value) NPV of all benefits: By adding PV of benefits of each year to the previous year
(Net Present Value) NPV of all costs: By adding PV of costs of each year to the previous year
(Return of Investment) ROI: BY dividing the Overall NPV by the NPV of all costs
(Break Even Point) BEP: Find the year when the Overall NPV cash flow turns positive and do the following calculation:
Break-Even Ratio = (Yearly NPV Cash Flow - Overall NPV Cash Flow) / Yearly NPV Cash Flow
Try your program for 5 years, 50,000 Annual Benefits, 28,500 Recurring Costs, 42,500 One Time Costs and 12% Discount rate.
BER = (15,303 - 9,139) / 15,303 = 0.403 Therefore the BEP is at 2.4 year. (See the chart below)
Any extra calculation and extra work such as Break-even point graph chart would be extra bonus points up to 10 points.
See samples below:
CPT-206 Final Projects
Sample of the output
The rest of the above form when you scroll down
Bonuses up to 10 points:
Create a button to create a graph
Create a button to print it as a report
Make it to work for variable years (5 to 10)
Graphical chart
Printable Report
Works for (5 to 10) years. Example of 7 years