vb.net barcode generator Benefits and costs when purchasing Class 4 or softswitch for 4,032 DS0s in Software

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Table 11-27 Benefits and costs when purchasing Class 4 or softswitch for 4,032 DS0s
Quick Response Code Scanner In None
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Income tax component Gross income Business expenses Taxable income before depreciation and/or capital gains Depreciation Salvage value Book value Difference salvage value vs. book value Tax on capital gains (20% of above) Income tax Profit after taxes and expenses
QR-Code Reader In None
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Class 4 $29,494,886 ($2,643,000) $26,851,886
Draw QR Code ISO/IEC18004 In Visual Studio .NET
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Softswitch $29,494,886 ($2,478,200) $27,016,686
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Barcode Creation In None
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($843,912) $473,102 $358,050 ($115,052)
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Draw Code 128C In None
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($175,005) $189,976 $74,250 ($115,726)
UPCA Maker In None
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Painting Data Matrix ECC200 In None
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$23,010 $26,851,886(.35) $9,398,160
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$23,145 $9,455,840
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Code 128 Code Set C Reader In None
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$17,453,726
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$17,537,701
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GS1 128 Printer In C#.NET
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Softswitch Economics
Softswitch Economics
Table 11-28 Net present value of Class 4 and softswitch when purchasing 4,032 DS0s
Softswitch NPV with OCC at 12%, 10% and 7% NPV ($17,537,701)(1.7355) $225,000 $30,211,680 NPV ($17,537,701)(1.6901) $225,000 $29,415,468 NPV ($17,537,701)(1.8080) $225,000 $31,483,163
Class 4 NPV with OCC at 12%, 10%, and 7% NPV ($17,453,726)(1.7355) $1,085,000 $29,205,941 NPV ($17,453,726)(1.6901) $1,085,000 $28,413,542 NPV ($17,453,726)(1.8080) $1,085,000 $30,471,337
Table 11-29 Salvage value for Class 4 and softswitch for 4,032 DS0s
Salvage value Class 4 (P-S)(A/P, I, N) ($1,085,000 $358,050)(.5917) $358,050(.12) $473,102
Salvage value softswitch ($225,000 $74,250)(.5917) $74,250(.12) 189,976
Buying Class 4 or Softswitch with Class 4 at $50 per DS0
The following net present value model is provided to demonstrate net present values when Class 4 vendors drastically lower their prices. This model reflects a sale price of $50 per DS0 for the Class 4 switch. In order to transmit voice over an IP network, the Class 4 switch also requires a VoIP gateway, as detailed in Table 11-30. Table 11-31 shows the operating expenses for Class 4 at $50 per DS0 versus softswitch. Table 11-32 outlines the costs
Table 11-30 Cost structure for Class 4 at $50 per DS0 plus a necessary VoIP gateway versus softswitch
Components of cost System Class 4 DMS-250 $50/DS0 4,032 VoIP gateway at $182,000 $383,600 $15,000 $398,000
Softswitch Convergent Networks ISC2000 $225,000
Installation Total (P Co)
$9,000 $234,000
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Softswitch Economics
Table 11-31 Operating expenses for Class 4 at $50 per DS0 versus softswitch
Components of cost Collocation rent (annual) Labor Maintenance contract IP circuits Total For life (j) of 2 years Class 4 DMS-250 $48,000 $85,000 (engineer) $38,360 $1,080,000 $1,251,360 $2,502,720
11
Softswitch Convergent Networks ISC2000 $12,000 $70,000 (technician) $22,500 $1,080,000 $1,239,100 $2,478,200
Table 11-32 Costs and benefits of buying Class 4 at $50 per DS0 plus a VoIP gateway
Income tax component Gross income Business expenses Taxable income before depreciation and/or capital gains Salvage value Book value Difference salvage value versus book value Tax on capital gains (20% of above) Income tax Profit after taxes and expenses
Class 4 $29,494,886 ($2,502,720) $26,992,166
Softswitch $29,494,886 ($2,478,200) $27,016,686
$176,264 $115,080 ($61,184)
$189,976 $74,250 ($115,726)
$12,236 $26,992,166(.35) $17,532,672 $9,447,258
$23,145 $9,455,840 $17,537,701
and benefits of buying Class 4 at $50 per DS0 plus a VoIP gateway. The net present value of Class 4 at $50 per DS0 with a VoIP gateway versus softswitch is covered in Table 11-33. It is interesting to note that even with the Class 4 at $50 per DS0, it does not exceed the softswitch in net present value. However, the difference between the two platforms is inconsequential.
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Softswitch Economics
Softswitch Economics
Table 11-33 NPV Class 4 at $50 per DS0 plus a VoIP gateway versus softswitch
Softswitch NPV with OCC at 12%, 10%, and 7% NPV ($17,537,701)(1.6901) $29,415,468 NPV ($17,537,701)(1.7355) $30,211,680 NPV ($17,537,701)(1.8080) $31,483,163 $225,000
Class 4 NPV with OCC at 12%, 10%, and 7% NPV ($17,532,672)(1.6901) $383,600 $29,248,368 NPV ($17,532,672)(1.7355) $383,600 $30,044,352 NPV ($17,532,672)(1.8080) $383,600 $31,315,470
$225,000
$225,000
Net Present Value When Softswitch Generates Greater Revenue
According to Laura Thompson, Vice President of Marketing and Channels at softswitch vendor Sylantro (www.sylantro.com), a softswitch-enabled service provider could enjoy up to 25 percent greater revenue by virtue of offering high-margin calling features that a Class 4 or 5 service provider cannot offer. The following net present value model will determine if a higher net present value is achieved where the softswitch-enabled service provider is enjoying revenues greater than that of the Class-4-equipped service provider. Table 11-34 outlines the costs and benefits when softswitch generates 25 percent more revenue than Class 4, while Table 11-35 shows the NPV when softswitch generates 25 percent more revenue than Class 4. The previous tables denote the net present value when softswitch generates 25 percent more revenue than Class 4. In this model, the net present values for softswitch are over 30 percent more for softswitch than for Class 4. This is a significant difference that could sway decision makers to choose softswitch over Class 4. The previous net present value model also illustrates the advantages a service provider could enjoy when not paying access fees or paying into the Universal Service Fund. For this model, it is assumed that the Class 4 solution is not a phone-to-phone IP service and it is not considered an enhanced service provider; it must pay access fees and pay into the Universal Service Fund. The softswitch-enabled service provider is operating as a phone-tophone IP service provider and is exempt from paying origination and termination fees to local service providers. The gross income figure is the
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