A supermall with two levels is under construction. The plan is to install only 9 elevators at the start, although the ultimate design calls for 16. The question arises as to whether to provide necessary facilities (supports, wiring conduits, motor foundations, etc.) that would permit the installation of the additional elevators at the mere cost of their purchase and installation or to defer investment in these facilities until the elevators actually need to be installed. Additional annual expenses are estimated at $7,000 for each elevator after it's installed. Assume these costs begin one year after the installation. At an interest rate of 12%, compare the net present worth of each option over eight years. The two options are: Option A Provide these facilities now for all seven future elevators at $300,000 Option B Defer the investment as needed. Install two more elevators in two years, three more in five years, and the last two in eight years. The installation of these facilities at the time they are required is estimated to cost $140,000 in year 2, $160,000 in year 5, and $180,000 in year 8
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
A supermall with two levels is under construction. The plan is to install only 9 elevators at the start, although the ultimate design calls for 16. The question arises as to whether to provide necessary facilities (supports, wiring conduits, motor foundations, etc.) that would permit the installation of the additional elevators at the mere cost of their purchase and installation or to defer investment in these facilities until the elevators actually need to be installed. Additional annual expenses are estimated at $7,000 for each elevator after it's installed. Assume these costs begin one year after the installation. At an interest rate of 12%, compare the net present worth of each option over eight years. The two options are:
- Option A Provide these facilities now for all seven future elevators at $300,000
- Option B Defer the investment as needed. Install two more elevators in two years, three more in five years, and the last two in eight years. The installation of these facilities at the time they are required is estimated to cost $140,000 in year 2, $160,000 in year 5, and $180,000 in year 8
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