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Need to Calculate ROI and NPV

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Customer is considering acquiring a wireless order taking system I need to calculate return on investmen (ROI) and net present value (NPV). The acquisition cost is $35,000 paid at time of installation. It reduces wait staff by one person: Figure $10 per hour, or 2020 hours per year + 18% benefits. Money costs are 7% and the system may become obsolete in three years. I am unsure how to make these calculations and need help in doing so.

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Solution Summary

This solution provides a sample Excel calculation of the given Capital budgeting problem.

Solution Preview

Acquisition cost $35,000

Savings per annum
2020 hours @$10 per hour $20,200
+ Benefits @18% $3,636
Total savings ...

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