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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
A mobile phone company identified a project to develop a new information system for its call center. The project is estimated to cost $946,000. There will also be a net increase of $80,000 per year in ongoing operations and support costs. The annual benefits are described as: ? Reduce customer defections by 1,750 per year. Each defection is estimated to cost the company $500. ? Reduce service call costs by 20% from $1.2 million per year to $960,000 per year. ? Eliminate call-backs to customers because of failed service calls. In an average year, the number of call-backs has been 1.5 million per year with a cost of $0.46 per call-back. If the company’s discount rate is 8%, what is the net present value (NPV) for this project after 3 years of operation? Support your answer. Would you invest in this project? Explain fully
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