Details of Costing & ROI

Now, we still left Tutorial 3 yet to complete. It is the last but it is the most important tutorial among the 5 tutorials. In the class, we learned different types of cost that will be incurred in our project including fixed cost, variable cost and other cost. In the Tutorial 3, we need to perform an ROI (Return of Investment) on our project and indicate the assumptions we have make such as how much we hire a worker. To make a decision whether to implement a project, the ROI should be at least 0.5, else we must re-consider whether we want to continue on it.  

Due to the Chinese New Year holiday is coming soon, our beloved lecturer gives us much time to complete our Tutorial 3 and Tutorial 5…..the submission date for both tutorials is on 9^th February. Yeah!!! ^.^ 

Our calculation on costing and ROI is based on the yearly basic. Below is the summary: 

Total Cost of Expenses 

Contingency Cost = total cost of investment x 10%

                              = S$55,945 x 10%

                              = S$5,594.50 (so we take S$5,595 as a round cost)

The total investment cost are = total expenses + total contingency cost
                                                = S$55,945 + S$5,595
                                                = S$61,540

Benefits/Gain from the investment

ROI = (Gain from Investment – Costs of Investment)/Costs of Investment

        = S$(120,120 – 61,540)/S$61,540

        = 0.95