Mike Falkenstein
FINA 4210
Dr. Matt Blasko
8 February 2013

Chocolate Confections Corporation Case Study

(1) Provide an Executive Summary (2-3 paragraphs, overview) of the situation and the issues.
The Human Resource Department of the Chocolate Confections Corporation has enlisted the services of the Forrester Consulting Group in selecting a new software package that will place them at the forefront of the human-resources/payroll computing community. With the implementation and integration of a new software system, the HR Department hopes to gain a more user-friendly system that will streamline HR and payroll business processes. The vice president of the Human Resources Department, Monica A. Bentz, appointed a “working committee” to …show more content…

However, the 5% inflation rate seems high compared to the U.S. historical average rate of inflation of approximately 2%.

(3) Are there any other costs or benefits that should have been included? Chocolate Confection Corporation should have included an analysis of the different payment structures for each system. Since the software companies have different due dates for their sales, CCC should include the time value of money inherent in the different due dates. Benefits – increased efficiency of workers, savings from not having to outsource Costs – upgrading computers today rather than upgrading over 2 year period (4) Based on your answers to the individual savings or cost components listen above and throughout the case, prepare a revised “discounted cash flow analysis.” Calculate the NPV and IRR of this project.

(5) Does the 14% discount rate seem right? Provide a sensitivity analysis of NPV (based on your cash flows) with respect to the discount rate.

(6) Are there any other considerations necessary when making these administrative IT software investments? When making this administrative IT investment, a large drawback from an ethical stance (which is not a drawback financially) is the loss of jobs, especially in the HR department as well as hour cuts due to the improved efficiency generated by the new system. There is also the issue of training employees to use the software and the time it will take before everyone is comfortable