Information Technology Project Management
9th Edition
ISBN: 9781337101356
Author: Kathy Schwalbe
Publisher: Cengage Learning
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Expert Solution & Answer
Chapter 4, Problem 5QQ
Program Description Answer
“20 percent” is derived as the estimated return on investment (ROI) if, the total discounted benefits is $120,000 and a total discounted cost is $100,000.
Hence, the correct answer is option “C”.
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Students have asked these similar questions
Given the following information for a one-year project, answer the following questions. Recall that PV is the planned value, EV is the earned value, AC is the actual cost, and BAC is the budget at completion.
PV = $23,000
EV = $20,000
AC = $25,000
BAC = $120,000
What is the cost variance, schedule variance, cost performance index (CPI), and scheduleperformance index (SPI) for the project?
How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget?
Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned?
Use the schedule performance index (SPI) to estimate how long it will take to finish this project.
Sketch the earned value chart based for this project, using Figure 7-5 as a guide.
Given the following information for a one year project, address the following queries:
Planned Value PV = $2300
Earned Value EV = $2000
Actual cost AC = $2500
Budget at completion BAC = $12000
Formulas are given below. Hint: Chapter 7, Page 312 to 316 of your ref book (IT Project Management by kathy)
What is the cost variance, schedule variance, cost performance index CPI and schedule performance index SPI for the project.
How is the project doing? Is it ahead of schedule or behind the schedule? Is it under budget or over budget?
Use the CPI to calculate the estimate at completion EAC for the project. Is the project performance better or worse than planned?
Use the SPI to identify how long it will take to finish.
Draw the earned value chart for this project. Sample is given below.
Consider the following information about a project:
Project
Year 0
Year 1
Year 2
Year 3
Year 4
Costs
$160,000
$43,000
$50,000
$50,000
$64,000
Benefits
$0
$400,000
$400, 000
$500,000
$500,000
A ) Calculate the NPV assuming 10% discount rate
B ) Determine in which year will be the payback
C ) Calculate (ROI)?
Chapter 4 Solutions
Information Technology Project Management
Ch. 4 - Describe project integration management. How does...Ch. 4 - Prob. 2DQCh. 4 - Summarize key work involved in each of the six...Ch. 4 - Prob. 4DQCh. 4 - Discuss the importance of following a...Ch. 4 - Which of the following processes is not part of...Ch. 4 - Prob. 2QQCh. 4 - Prob. 3QQCh. 4 - A new government law requires an organization to...Ch. 4 - Prob. 5QQ
Ch. 4 - Prob. 6QQCh. 4 - Prob. 7QQCh. 4 - Prob. 8QQCh. 4 - Prob. 9QQCh. 4 - What tool and technique is used for all processes...Ch. 4 - Write a short paper based on the chapters opening...Ch. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Read the report “2015 Pulse of the Profession®:...Ch. 4 - Prob. 10ECh. 4 - Prob. 1TCh. 4 - Prob. 2TCh. 4 - Prob. 3TCh. 4 - Prob. 4TCh. 4 - Prob. 6T
Knowledge Booster
Similar questions
- When calculating the NPV of a project, the time value of money is an important consideration. Is the time worth of money just as essential in low-inflation periods as it is in high-inflation periods? Explain your response.arrow_forwardGiven the following information for a one-year project, answer the following questions. Recall that PV is the planned value, EV is the earned value, AC is the actual cost, and BAC is the budget at completion. PV = $23,000 EV = $20,000 AC = $25,000 BAC = $120,000 Use the schedule performance index (SPI) to estimate how long it will take to finish this project.arrow_forwardAssuming the average productivity for similar project is 6 FP/person-month and cost is 1,760$ per FP, Estimate the price and timeline for the project based on the calculated function point and historical productivity data! Example FP = 45.5arrow_forward
- If Sales ≤ B.E.P, the MOS% is still good and a Project may be profitablearrow_forward1, Calculate Estimated effort for a semi-detached project of 56KlOC if the following cost drivers are set Product cost drivers (High), Computer cost drivers (Nominal), Personal cost drivers (low) and project cost drivers (High)? Hint (use chart) (5) (PLO1, PLO3, CLO2)arrow_forwardScenario One: Assume you are put in charge of launching a new website for a local nonprofit organization. What costs would you need to account for? Make a list of expected costs and benefits for the project. You don’t need to list values, just sources of expense. Consider both one-time and recurring costs. Consider the situation you addressed in the previous question. Create numeric cost estimates for each of the costs you listed. Calculate the net present value and return on investment. Include a break-even analysis. Assume a 10 percent discount rate and a five-year time horizon. Scenario Two: Assuming monetary benefits of an information system at $85,000 per year, one-time costs of $75,000, recurring costs of $35,000 per year, a discount rate of 12 percent, and a five-year time horizon, calculate the net present value of these costs and benefits of an information system. Also calculate the overall return on investment of the project and then present a break-even analysis. At what…arrow_forward
- In order to control expenses and monitor project progress, explain why earned value management (EVM) is not used more often. What are some general rules for establishing if a cost variance, schedule variance, cost performance index, or schedule performance index is positive?arrow_forwardAssume, if the earned value is equal to actual cost of the project means, ____________? a. There is no variance in the cost b. There is no variance in the schedule c. There is variance in the cost d. There is variance in the schedulearrow_forwardGiven the following information for a one-year IT project of Gulf Hospital System, answer the following questions. Recall that PV is the planned value, EV is the earned value, and AC is the actual cost. PV = $ 32,000 EV = $ 25,000 AC = $ 36,000 Calculate the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the given project. Justify the results.arrow_forward
- Justify the use of Earned Value Management (EVM) to control costs and monitor project progress, and hypothesis as to why it is not used more often. For example, what are some general rules of thumb for deciding whether or not a cost fluctuation, a schedule variation is positive or negative?arrow_forwardThe time value of money is a key factor to take into account when determining a project's net present value (NPV). Is the time value of money just as important during times of low inflation as it is during times of high inflation? Describe your reaction.arrow_forwardAverage velocity = (Remaining effort Day 1 - Remaining effort Current Day)/ (Current Day - Day 1) Estimated completion date = Current Day + (Remaining effort/Average velocity) Create a burndown chart for the given data using Excel or the software of your choice. (Hint:Youcan just create a line or column chart showing the Days on the horizontal axis and Remaining effort on the verticalaxis.You do not need to show Ideal velocity.) What is the average velocity for the project, in story points per day? (Assume the Current Day is Day 3). What is the project’s expected completion date?arrow_forward
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