BeGood Baking Contribute is a narrow bakery contribute cetification cemed as a closely held cetification. The cetification supplies unprepared baking materials, paper commodities, and equipment to restaurants and bakeries in three states in the remarkable mid-west. Most of its transaction, however, is located in a large metropolitan area. BeGood wants to acception its closeness in the district and subsubserve five states. In certainty, the owners of BeGood would approve 75% of their transaction to succeed from throughout the district rather than the ordinary metropolitan area. In enjoin to do this, the owners know they must alter offerings and lines of transaction.
Currently, BeGood has a phone character where customer enjoins are seizen; these enjoins are then sent to shipping where the enjoin is employed in its large repository and shipped amid indelicate days. BeGood outsources its shipping to a topical trucking cetification. Once the enjoin ships, every paperwork goes to the accounting province where it is entered into the accounting plan. BeGood stationary uses the corresponding accounting plan it has used past the survival of the cetification. Every aging of receivables and other resolution is effected using Excel spreadsheets. Purchasing and tracking of list are effected barely by the repository overseer. Invoices ce list purchasing are sent to the accounting province when commodities are accepted.
The owners at BeGood are wondering how they can economize an online closeness and raise automate its plans in enjoin to fit its enlargement and alter its transaction. The owners may also approve to unfold into the dispose-of transaction.
You possess been paid as a full-time staff accountant at BeGood Baking Contribute and possess been abandoned the work of evaluating and applauding a viable accounting counsel plan ce the accounting and financial data of BeGood in enjoin to fit comment and permutation. As you prepare your learning, you gain that divers provinces are implicated in the counsel plan, and message is explanation.
BeGood Baking Contribute is regarding adding an automated enjoining module to their ordinary AIS plan. As the accountant interfering ce this change, you are in accuse of the resolution and donation of the counsel and warning ce the novel plan. In performing the resolution ce your donation, you possess signed brace feasible modules that earn rise the needs of the cetification. Both modules repay a unconditional NPV.
Module Vendor A B
Useful Life 5 years 5 years
Acquisition Cost 300,000 250,000
Yearly Operating Costs 95,000 100,000
Yearly Benefits 205,000 150,000
Cost of Capital 10% 10%
Payback 1.5 years 2.5 years
Your work is to confer-upon to skill a overture outlining your resolution and warning of which plan to lapse. Write a overture to skill outlining the decision-making regularity and the plan you applaud. Include in your overture:
The steps expedient in evaluating and applauding an AIS module. Note: these are the steps you would seize to develop yourself on the need ce a novel example, the options adapted, and the excellent of the best module.
List of needs BeGood has with i-elation to this automated enjoining module. Include confer-upon needs as well-behaved-behaved enlargement needs
List of criteria you used in choosing a module. Include financial criteria, comment and enlargement criteria, and ordinary needs. Be assured to address inner govern and audit needs.