| Gray cells contain calculations that should not be altered. |
| Source Outdoors |
| Technology Budgeting Tool |
| 6/21/18 |
| Company Data |
| Required rate of return | 10% |
| Tax rate | 30% |
| Initial Investment | YEAR | 1 | 2 | 3 |
| Hardware costs (e.g., servers, networking hardware, PC upgrades) | $25,000 |
| Purchased software costs / licenses (e.g., e-commerce, ERP, CRM software) | $20,000 |
| Development costs (e.g., systems design and configuration / development) | $10,000 |
| Training costs (e.g., develop and conduct initial training) | $20,000 |
| Conversion costs (e.g., initial data conversion from existing systems being replaced) | $0 |
| [Other initial investments] | $0 |
| [Other initial investments] | $0 |
| Total Initial Investments | $75,000 |
| Benefits from Technology Strategy | YEAR | 1 | 2 | 3 |
| Increased sales and revenue | | $150,000 | $175,000 | $180,000 |
| Reduced personnel costs | | $25,000 | $25,000 | $25,000 |
| Reduced product costs | | $0 | $0 | $0 |
| Reduced distribution costs | | $0 | $0 | $0 |
| Reduced advertising and marketing costs | | $0 | $0 | $0 |
| [Other benefits] | | $0 | $0 | $0 |
| [Other benefits] | | $0 | $0 | $0 |
| [Other benefits] | | $0 | $0 | $0 |
| Total Benefits | | $175,000 | $200,000 | $205,000 |
| Costs (Excluding Initial Capital Investments) | YEAR | 1 | 2 | 3 |
| Depreciation on capital expenditures (calculation uses three-year period) | | $25,000 | $25,000 | $25,000 |
| Software licensing fees | | $5,000 | $5,000 | $5,000 |
| Ongoing user support and training (e.g., help desk and training personnel) | | $10,000 | $10,000 | $10,000 |
| Ongoing systems support (e.g., IT maintenance) | | $10,000 | $10,000 | $10,000 |
| Hosting / Cloud computing | | $15,000 | $15,000 | $15,000 |
| General and administrative | | $5,000 | $5,000 | $5,000 |
| [Other costs] | | $0 | $0 | $0 |
| [Other costs] | | $0 | $0 | $0 |
| [Other costs] | | $0 | $0 | $0 |
| Total Costs | | $70,000 | $70,000 | $70,000 |
| Totals | YEAR | 1 | 2 | 3 |
| Net Benefits (Costs) | | $105,000 | $130,000 | $135,000 |
| Tax | | $31,500 | $39,000 | $40,500 |
| Value after tax | | $73,500 | $91,000 | $94,500 |
| Depreciation added back | | $25,000 | $25,000 | $25,000 |
| Cash flow | ($75,000) | $98,500 | $116,000 | $119,500 |
| Cumulative cash flow | ($75,000) | $23,500 | $139,500 | $259,000 |
| Evaluation Metrics | |
| Net present value (NPV) | $200,195 |
| Internal rate of return (IRR) | 129.16% |
| Payback period (in years) | 0.76 |
| Three-year total ROI: (total benefits before taxes - total costs)/total costs | 176.19% |
maddy2603
Returnoninvestmenttemplate2.xlsx
