A32

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Sheet1

Year Intial Cost Anually Support Staff Reduction Inventory Reduction Legacy Maintenance Savings Total Saving Cash OutFlow Cumaltive
0 ($1,200,000) 0 0 0 0 $0 ($1,200,000) ($1,200,000)
1 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) ($950,000)
2 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) ($700,000)
3 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) ($450,000)
4 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) ($200,000)
5 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) $50,000
6 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) $300,000
7 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) $550,000
8 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) $800,000
9 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) $1,050,000
10 ($250,000) $100,000 $300,000 $100,000 $500,000 ($250,000) $1,300,000

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Year 0 1 2 3 4 5 6 7 8 9 10
Initial Cost ($1,200,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000)
Employee Saving 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000
•Reduction in inventory carrying costs = $300,000/yr savings $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000
Legacey System Saving $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Yearly Saving 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
Cash Flow ($1,200,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000) ($250,000)
Cumulative ($1,200,000) ($950,000) ($700,000) ($450,000) ($200,000) $50,000 $300,000 $550,000 $800,000 $1,050,000 $1,300,000
Payback Period in Years
ROI= Net Profit/Cost * 100
Net Profit
Cost

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