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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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Project Management: The Managerial Process (Mcgraw-hill Series Operations and Decision Sciences)
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- The 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_forwardEarned Value Management (EVM) is a method or an approach in measuring the project performance throughout the project at any point of time that integrates the variances of cost and schedule in assisting organizations to decide either to continue or terminate the project. Within 200 days, the equipment supplier has agreed to supply 100 units of spare equipment at the price of RM500 per unit. However, 50 days later, the supplier can only supply 21 units with an actual total cost of RM11,400. c. Indicate the cost performance of the supply (in percentage)d. Indicate the performance of the supply in term of schedule (in percentage)arrow_forwardEarned Value Management (EVM) is a method or an approach in measuring the project performance throughout the project at any point of time that integrates the variances of cost and schedule in assisting organizations to decide either to continue or terminate the project. Within 200 days, the equipment supplier has agreed to supply 100 units of spare equipment at the price of RM500 per unit. However, 50 days later, the supplier can only supply 21 units with an actual total cost of RM11,400. a. Indicate either the supply is ahead or behind the schedule (in days).b. Indicate either the supply is under or exceed the budget (in amount).c. Indicate the cost performance of the supply (in percentage)d. Indicate the performance of the supply in term of schedule (in percentage)arrow_forward
- What does a project’s NPV of $1,500 mean?arrow_forwardAssuming that the project is performed by an outside contractor, what is the role of the customer's employees in the planning stages of the project life cycle?arrow_forwardDetermine the probability that the project will take less than 42 weeks.arrow_forward
- Define Time–Cost Models and Project Crashing?arrow_forwardWhen planning, who is responsible to breakdown and define the different levels of the project plan? Process Owner Project Manager Project Scheduler Project Estimatorarrow_forwardA project scope definition document for a Reusable Water Bottle. A scope statement is a document that defines all the elements of the project scope as well as assumptions, project requirements and acceptance criteria. A Reusable Water Bottle project scope statement will act as the primary tool for stakeholders and teammates to reference and use as a guideline to accurately measure project success. State the following: Project Information Justification of the Project: This is a place to define the targets you want to achieve. These can include things such as the launch data, better customer satisfaction, greater conversion rates, etc. Project Scope: List the cope elements Project Deliverables: That is, what you’ll be producing during the project to meet your business objectives. Your final deliverable will be the goal of the whole project. Note that you are not producing anything in this project except for the project management documents. Project Exclusions: Define the project…arrow_forward
- A project is set to be completed in 12 months with an estimated budget cost of $520,000. 6 months have passed, and expenses were $240,000. The completion of work is set to be $270,000 What is the planned value PV of the project? What is the actual cost AC of the project? What is the earned value EV of the project? Find the SPI and CPI of the project. Is the project ahead or behind schedule? Is the project under or over budget? What is the estimated cost to complete the project?arrow_forwardgiven the following information for a 1-year project, answer the following questions. Assume you have actual and earned value data at the end of the second month. Recall that PV is the plan value, Evie is the earned value, AC is the actual cost, and BAC is the budget at completion.pv =$ 23,000ev = 20,000ac= 25,000bac = 130,000a. what is the cost variance, schedule variance, cost performance index CPI and schedule performance index SPI for the project?B. how is the project progressing? Is it ahead of schedule or behind schedule? Is it under budget or over budget?C. use the CPI to calculate the estimate at completion EAC for this project.d. use the SPI to estimate how long it will take to finish this project.e. sketch the earned value chart for this project, use the figure below as a guide. Assume the data for month one is half of the values given for Pv, Ev and ac at the end of month 2arrow_forwardAnalyse the significance of gearing and insolvency for project cost management.arrow_forward
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