UTC Clothing is deciding whether or not to invest in a new inventory tracking system
New system will cost 10 million RWF up front
Expected savings:
Years 1-2 à 2 million RWF per year
Years 3-5 à 3 million RWF per year
In this simple example, the investment yields a positive result (+3 million RWF over 5 years)
GO THROUGH BULLETS UP TO YEAR 3-5
Qs: So what would the investment result be? Is this a good investment to make?
This type of analysis is often done as part of the budgeting process as different areas of the organisation put forward their requests for investments in the coming years – then management will compare and prioritise which ones they want to do.