Berjaya Holding Sdn. Bhd is planning to implement a new reservation system that incorporates the existing web-based system with a new data mining capability. The new system will enable the integration of multiple systems across the company and streamline the processes between various departments. The total cost to implement the system is about RM1.5 million and it is anticipated to generate more reservations that lead to yearly return of RM500,000 for the next five years. The project is assigned to the Information Technology Division to lead and you have been appointed as the project manager. a) Considering that discount rate is 10%, calculate the Net Present Value (NPV) of this project. (Discount Factor (DF) for year 1 = 0.909, year 2 = 0.826, year 3 = 0.751, year 4 = 0.683 and year 5 = 0.621) (6 marks) b) Based on the answer in 5 a), should Berjaya Holding carry out the project? Explain your answer. (2 marks) c) In justifying an IT investment, another alternative to NPV is the Return on Investment (ROI). Calculate the total ROI and Annual ROI of this investment. (3 marks)
