Company B is considering implementing a new CRM Customer Relationship Management) system for its 10 UK facilities. The initial cost of the project will be £500,000 and the system is predicted to have a useful life of five years. The annual cost of maintaining the system will be £20,000, but it will increase revenues by £100,000 per year. What can we conclude about this potential project?
A) Payback period will be 6.25 years
B) If we consider only the information available, this would not be considered a worthwhile investment.
C) Payback period will be 5 years.
D) If we consider only the information available, this would be considered a worthwhile investment.
E) NPV is positive.
F) A and B only
G) C, D, and E only

Question

Company B is considering implementing a new CRM Customer Relationship Management) system for its 10 UK facilities. The initial cost of the project will be £500,000 and the system is predicted to have a useful life of five years. The annual cost of maintaining the system will be £20,000, but it will increase revenues by £100,000 per year. What can we conclude about this potential project? 
A) Payback period will be 6.25 years
B) If we consider only the information available, this would not be considered a worthwhile investment.
C) Payback period will be 5 years.
D) If we consider only the information available, this would be considered a worthwhile investment.
E) NPV is positive.
F) A and B only
G) C, D, and E only

Quizplus · Accepted Answer

The Answer of Company B is considering implementing a new CRM Customer Relationship Management) system for its 10 UK facilities. The initial cost of the project will be £500,000 and the system is predicted to have a useful life of five years. The annual cost of maintaining the system will be £20,000, but it will increase revenues by £100,000 per year. What can we conclude about this potential project? 
A) Payback period will be 6.25 years
B) If we consider only the information available, this would not be considered a worthwhile investment.
C) Payback period will be 5 years.
D) If we consider only the information available, this would be considered a worthwhile investment.
E) NPV is positive.
F) A and B only
G) C, D, and E only

Company B Is Considering Implementing a New CRM Customer Relationship