CourseWork (the dead line is on the 26 of march ) i will be able to

(the dead line is on the 26 of march ) i will be able to give more time if needed - Coursework Example 2009). In the context of business planning, the factors associated with cost and benefits are critical and must be understood. Similarly, cost benefit analysis is also critical in the context of projects associated with GIS engineering and management. Scenarios This report is associated with cost / benefit analysis for two scenarios. The first scenario includes an interest rate of 4%, which indicates it as a best-case scenario, while the other scenario is the worst-case scenario with the interest rate of 10%. Specification for Costing Cost of five workstations with minimum configuration of Quad-core processor, 2GB RAM and 250GB Hard Disk is illustrated below: Cost of single Workstation * 5 = ? 1300 * 5 = ?6500 Cost of upgrades in Year 3 and 6 = 2 *?650 * 5 = 2 * ?3000 = ?6000 Licensing Cost for GIS Software Cost for Year 1,2,4,6 = ?10000, Cost for Year 3, 5, 7 = ?3000 Data Purchasing Cost Total cost of Map Purchase = ?19500 Employment Cost Total costs of Salaries increasing at 3.5% p er annum are as follows: Year 1 = ?195,000, Year 2 = ?202,000, Year 3 = ?209,000, Year 4 = ?216,000, Year 5 = ?224,000, Year 6 = ?231,000 and for Year 7 = ?239,000 Conversion and Miscellaneous Cost Conversion Cost (1 time) = ?5000 (Given) Miscellaneous Cost = ?3000 (Given) Benefit Total Savings in the context of employments as salaries are as follows: Year 1 = ?195,000, Year 2 = ?202, 000, Year 3 = ?209,000, Year 4 = ?216,000, Year 5 = ?224,000, Year 6 = ?231,000, Year 7 = ?239,000. Efficiency Savings (Increasing at the rate of 4.5%) For Year 1 = ?15000, Year 2 = ?15675, Year 3 = ?16380, Year 4 = ?17117, Year 5 = ?17887, Year 6 = ?18691 and Year 7 = ?19532. Scenario 1 ( Interest Rate 4%) The first scenario demonstrates the implementation of a GIS project with the interest rate of 4% which is considered as lowest when compared to normal. The interest rate of 4% (0.04), Fig 1.1 illustrates similarity for both cost and benefits in the graph over the period of 7 years , with the cost be nefit ratio of 1. Moreover, the net present value is also demonstrating 1st and 4th year of implementation is negative for the projects.In comparision with both the cases, consequent years 2 and 5 are highlighting recovery and constant positivity for the net present value. Figures for implemtation of the net present value over 7 years are calcuated as 16.54. Moreover, the profitibality month starts from the 2nd year till the 5th year with implementation outweigh is cost that conludes to benefit. Both the implementation present value and the net present value at the end of 5 years are positive. For this reason, productivity does not requires icrement as the net present value is already shoiwng healthy progress at the end of year 7. Scenario 2 (Interest Rate 10%) This is the scond scenario in which the worst case has been considered. The interest rate allocated for the worst scenario is at 10% (0.1), which is considerably high as compared to normal interest rates for worst case scenar ios. In figure 1.2, the demonstration of the graph is reflecting cost and benefit worms are close and following in the same direction, while it is also showing that cost overruns arises in 1st and 4th years . Whereas, the reaminder for cost and benefits