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Calculate the Pay-off Period for an IS project that has a $200,000 development cost in year...

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Finance

Calculate the Pay-off Period for an IS project that has a$200,000 development cost in year 1 and annual $40,000 maintenancecosts from year 2 onwards. The benefits are expected to be $100,000in Year 2 and growing $25,000 a year as adoption of the systemincreases. The discount rate is 0%.

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Calculation of payoff period for an IS project Explaination As the project life is not given in the problem it is assumed that it has unlimited usual life    See Answer
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Calculate the Pay-off Period for an IS project that has a$200,000 development cost in year 1 and annual $40,000 maintenancecosts from year 2 onwards. The benefits are expected to be $100,000in Year 2 and growing $25,000 a year as adoption of the systemincreases. The discount rate is 0%.

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