CAS-001 · Question #73
To support a software security initiative business case, a project manager needs to provide a cost benefit analysis. The project manager has asked the security consultant to perform a return on…
The correct answer is D. Nearly three years. Annual savings per project = $50,000 × 30% = $15,000. Total annual savings across 8 projects = $15,000 × 8 = $120,000. Time to recoup the $300,000 investment = $300,000 ÷ $120,000/year = 2.5 years. This rounds to 'nearly three years.' At year 2 only $240,000 has been recovered…
Question
To support a software security initiative business case, a project manager needs to provide a cost benefit analysis. The project manager has asked the security consultant to perform a return on investment study. It has been estimated that by spending $300,000 on the software security initiative, a 30% savings in cost will be realized for each project. Based on an average of 8 software projects at a current cost of $50,000 each, how many years will it take to see a positive ROI?
Options
- ANearly four years
- BNearly six years
- CWithin the first year
- DNearly three years
How the community answered
(16 responses)- B6% (1)
- C6% (1)
- D88% (14)
Explanation
Annual savings per project = $50,000 × 30% = $15,000. Total annual savings across 8 projects = $15,000 × 8 = $120,000. Time to recoup the $300,000 investment = $300,000 ÷ $120,000/year = 2.5 years. This rounds to 'nearly three years.' At year 2 only $240,000 has been recovered (still a net loss), and at year 3 the cumulative savings reach $360,000, exceeding the initial investment - meaning the ROI becomes positive partway through year 3, making 'nearly three years' the correct characterization.
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