Project Management: The Managerial Process (Mcgraw-hill Series Operations and Decision Sciences)
7th Edition
ISBN: 9781259666094
Author: Erik W. Larson, Clifford F. Gray
Publisher: McGraw-Hill Education
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Chapter 2, Problem 3E
A five-year project has a projected net cash flow of $15,000, $25,000, $30,000, $20,000, and $15,000 in the next five years. It will cost $50,000 to implement the project. If the required
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You are the head of the project selection team at Broken Arrow Records. Your team is considering two different recording projects. Based on past history, Broken Arrow expects at least a rate of return of 20 percent. Given the follwoing information for each project, which one should be Broken Arrow's first priority? Should Broken Arrow fund any of the other projects? If so, what should be the order of priority based on return on investment?
Calculate the total annual cost and net annual revenue of the project.
Rate of interest = 10%
Your firm MS MACKAY LTD. won a contract of €1,785,000 to construct a 161kV/33kV sub-station. You have been selected as the project manager to lead the project team for the successful execution of the project. You are the project manager, there are a total of 8,400 hours of work schedule on the project. You made your checks with the accounting department, and they told you that you have spent a total of €1,144,000. According to the schedule, your team should have worked 5000 hours, but your foreman says that the team was allowed to work some overtime, and they have actually put in 5600 hours of work.
(i) Write the scope of the project
(ii) Provide the WBS for the project.
Chapter 2 Solutions
Project Management: The Managerial Process (Mcgraw-hill Series Operations and Decision Sciences)
Ch. 2 - Describe the major components of the strategic...Ch. 2 - Explain the role projects play in the strategic...Ch. 2 - How are projects linked to the strategic plan?Ch. 2 - The portfolio of projects is typically represented...Ch. 2 - Why does the priority system described in this...Ch. 2 - Why should an organization not rely only on ROI to...Ch. 2 - Discuss the pros and cons of the checklist versus...Ch. 2 - You manage a hotel resort located on the South...Ch. 2 - Two new software projects are proposed to a young,...Ch. 2 - A five-year project has a projected net cash flow...
Ch. 2 - You work for the 3T company, which expects to earn...Ch. 2 - You are the head of the project selection team at...Ch. 2 - You are the head of the project selection team at...Ch. 2 - The Custom Bike Company has set up a weighted...Ch. 2 - What is our major problem?Ch. 2 - Identify some symptoms of the problem.Ch. 2 - What is the major cause of the problem?
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, management and related others by exploring similar questions and additional content below.Similar questions
- A 4-year financial project has net cash flows of $20,000; $25,000; $30,000; and $50,000 in the next 4 years. It will cost $75,000 to implement the project. If the required rate of return is 0.2, conduct a discounted cash flow calculation to determine the NPV.arrow_forwardAfter six months of work on the project’s site, your company collected the following information relating to work done so far on the project BAC=$156,478.00, planned value=$95,565.24, Earned value =$92, 985.56, Actual cost =$95986.60. Calculate the cost and schedule performance indices and interpret your resultsarrow_forwardProject Typhoon has a net present value of $10,000 and a profitability index of 1.01. Project Cyclone has a net present value of $10,000 and a profitability index of 1.10. Project SurfsUp has a net present value of $10,000 and a profitability index of 1.05. If only one project could be undertaken, what should the oraganiztion select?arrow_forward
- Given the following information for a one-year project, answer the following questions. Recall that PVis the planned value, EV is the earned value, AC is the actual cost, and BAC is budget at completion.PV = $22,000EV = $20,000AC = $25,000BAC = $120,000a. What is the cost variance, schedule variance, cost performance index (CPI), and schedule performanceindex (SPI) for the projectb. How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or overbudget?c. Use the CPI to calculate at estimate at completion (EAC) for this project. Is the project performingbetter or worse than planned?d. Use the SPI to estimate how long it will take to finish this project.e. Sketch the earned value chart for this project.arrow_forwardUsing the information given in Chapter 19 Computational Exercise Questions 19.2-36 on page 596 in the paper textbook, and your responses to the questions in the Online Discussion this week, develop the following for Mary's wedding project: A risk management plan that includes at least one major risk, one medium risk and one acceptable risk, complete with mitigation plans. An expense budget for the activity elements included in the plan. Show details of Labor, Material and facilities rental.arrow_forwardGive an example of a project which is a failure in cost estimation and give suggestions for making it appropriate.arrow_forward
- Define the term Probability of Project Completion?arrow_forwardActual Costs for a project so far are $50,000, and the Estimate to Complete is $50,000. If a project’s Budget at Completion was originally $120,000, what is the Variance at Completion? Selected Answer:  $70,000 Answers: $50,000   $20,000  -$20,000  $70,000arrow_forwardThe following information has been computed from a project: Expected total project time = T = 62 weeks Project variance = 81 1- What is the probability that the project will be completed 18 weeks before its expected completion date? 2- Draw Normal Curve & Analysis your solution with conclusionarrow_forward
- On June 12, 2013, the Delta Corporation was awarded a $160,000 contract for testing a product. The contract consisted of $143,000 for labor and materials, the remaining $17,000 was profit. The contract had a scheduled start date of July 3. The network logic, as defined by the project manager and approved by the customer is the following: NETWORK LOGIC / ACTIVITY TIME (Weeks) AB 7 AC 10 AD 8 BC 4 BE 2 CF 3 DF 5 EF 2 FG 1  On August 27, 2013, the executive steering committee received the following report indicating the status of the project as of this time (end of week 8)  ACTIVITY % COMPLETE ACTUAL COST TIME REMAINING (Weeks) AB 100 $23,500 0 AC 60 $19,200 4 AD 87.5 $37,500 1 BC 50 $8,000 2 BE 50 $5,500 1 Is the project ahead of schedule or behind schedule and over budget or under budget? What recommendations would you make for this project?arrow_forwardProject B is the development of a facility in a remote area, of about GHS 5 million in value, of approximately 18 months’ planned duration. It is 30 per cent completed. Earned Value analysis shows that the project is not achieving its planned cost or progress targets. The project is also not achieving quality requirements. Some of the specialized components used for this project are only obtainable from overseas suppliers and are difficult to transport over the rough terrain near the project site. There has been a delay on ordering these components. The transportation of these components, which must be booked several months ahead, has not been arranged, and there is also difficulty with obtaining tradespeople with the requisite set of skills to install them. There are also several other risks associated with this project, including a quite basic business case, rudimentary project charter, poor definition of expected project outcomes, exchange rate risks and the potential for…arrow_forwardThe decision was made by JMP management that a certain critical development in the overall project will be subcontracted-out to a vendor. JMP has issued a six-month cost plus fixed fee contract for that development, and you are the vendor's project manager. The approved JMP budget for your development is $500,000.  A recent Earned Value Analysis that your firm (the vendor) has done shows that you will complete the project four weeks ahead of time, thus depriving your firm of $80,000 of billable time. Among your options are: 1. Since it was the approved budget, go ahead and bill JMP for the entire $500.000. 2. Inform JMP of the project status and completion date, and ask if they'd like to add any features to account for the monies spent. 3. Inform JMP of the project status and completion date. 4. Bill JMP for the $500,000 by adding more work at the end of the project.arrow_forward
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