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This is the question , honestly , you could skip the garbage at first and jump to the Question section.

IEN 363 Spring 2019 Fnancial Analys1S Assignment ost benefit analysis for the Long Engineering Company The Long Engineering Company (LEC) has decided to install a network system to help their technical support engineers (five of them who earn an average of $100,000 each per year) to deliver better customer service including: mail out sales and other literature, answer phone calls for technical assistance and log and forward repair requests using an alpha-numeric paging system that will be part of the new network system. Currently all company technical manuals and are in physical format hut will need to be scanned and converted to electronic readable form. There are about 3000 pages of technical literature. The initial feasibility study estimated that there would be savings in various areas including: (1) there are currently four clerical staff, two of these would no longer be needed ($60,000 per year each), and (2) Reduced long distance toll bils of $1,500 per month for calls to field support staff regarding repair requests. It was also expected that there would be an increase in sales of $400,000 per year because of improved customer service, with a gross profit rate of 40%. The company typically uses a cost of money (discount rate) of 20% for these types of projects Ten months ago, our companys IT consultant/vendor gave us the following proposal, and we prepared an Excel spreadsheet (see separate handout) showing a Net Present Value of $257,605 for the project: Our system will provide a full LAN configuration for your customer support ding: call logging by customer or inquirer, recording of nature of request and nature of response, access to all company technical literature online, and automatic message forwarding to hand-held devices of field service persons where necessary. The cost of the system includes the required file server and six workstations, laser printer and WAN communications adapter (S150,000). The software provided will include the necessary LAN operating system (Windows), and applications software to meet the functionality requirements mentioned above (S175,000). Existing staff should be able to handle the new system with additional training, as the entire system will be very user friendly with a low learning curve and should be easily administrated by one of the existing engineers, only absorbing 20% of his time. We do recommend that you budget for at least one week of training for each of your employees each year to gain and maintain the skills necessary to achieve full benefit from this system. It will also be necessary to budget for conversion of the companys technical literature at an estimated cost of $5 per page. A maintenance contract is available if you wish at a cost of 15% of the initial cost of the hardware. and a similar contract is available for the software. Training costs typically amount to $2500 per services area covering the major areas of functionality required inclu week, per employee. uestion The financial situation of the company has changed substantially in the last 10 months, so your manager wants you to make changes to the previous Excel spreadsheet so.as.to present a more conservative analysis by including the following changes 1. Assume that the engineer/supervisor who will be administering the system will have to devote 50% of his time the 1st year, 40% the 2nd year, 30% the 3rd year, and 20% the 4th and 5th years of the analysis. Hint: It is customary in business to allocate the portion of a resources cost/salary in direct relationship to the % of time it devotes to the project. 2. Assume that the anticipated sales nrease will be only $200,000 the 1st year, $300,000 the 2d year, and $400,000 the remaining 3 years of 3, Assume the gross profit rate will only be 20% throughout the study. 4. If the new Net Present Value (NPV) is negative, your manager wants you to make changes to the software initial cost until the NPV turns to zero (0) for the project. That will indicate the new, lower, price which we may want to negotiate for with the vendor if we dont want to lose money his ntoie

below is my excel sheet , I need to do the 4 requirements under the Question section.

Proposal Data Increased sales Discount Rate Hardware Maintenance Software Maintenance Gross Margin Weeks per Year Assistant Sala Engineer Sala 400,000 20% 15% 15% 40% 52 60,000 100,000 Staff assistants EngineersS Training for Assistants (Yes/No Data Conversion Cost of Training Training weeks Initial Training for Staff (weeks Initial Training for Engineers (weeks 2 15,000 2,500 NPV 257,605 Year Initial Costs Hardware Software Data Conversion People, Supervisor Training Costs 2 3 4 150,000 175,000) 15,000 Recurring Costs Hardware Maintenance Software Maintenance People, Supervisor Training Total Costs (22,500) (22,500) (22,500) (22,500) (22,500) 250 (20,000)(20,000) (20,000) (20,000) (20,000) (29,423) (29,423) (29,423) (29,423) (29,423) 98,173)(98,173) (98,173) (98,173 (26,250 250 250 250 340,000) (98,173 Initial Benefits Recurring Benefits Increase Profit Wage Saving Phone Bill Saving Total Benefits 160,000 120,000 18,000 298,000 160,000 160,000 160,000 160,000 120,000 120,000 120,000 120,000 18,000 18,000 18,000 18,000 298,000298,000 298,000 298,000 Net Cash Flow NPV (340,000) 199,827 199,827 199,827 199,827 199,827 257,605 166,522 138,769 115,641 96,36780,306

to make your life easier you could copy the numbers from my sheet but i dont know how the function work exactly , as the professor is the one who sets it up.

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