Project Cost Management

303KM Project Management

Coursework 1 contribute 15% toward final mark

Students should form teams with four or five members to work on the questions in this coursework. The purpose is to initiate in-depth discuss between team members so that students can benefit during the progression. Each team should hand-in one report with student names, student numbers, and session time stated on the cover page. Question 1 to 4 each weights 25 marks. Question 5 is marked by student peering assessment during presentation and weights 50 marks.

For question 5, each team should perform a 10 minutes presentation followed by 5 minutes Q&A during the followed tutorial session. Students asking complementary questions after the presentations will be awarded with in-class bonus. Ability to comprehend other group’s presentation and ask relevant question is an essential part of learning.

1. Perform a financial analysis for a project using the format provided in Figure 4-4 in the text or slide 11 of chapter 4 lecture notes. Assume the projected costs and benefits for this project are spread over four years as follows: Estimated costs are $100,000 in Year 1 and $25,000 each year in Years 2, 3, and 4. (Hint: Change the years in the figure from 0, 1, 2, 3, to 1, 2, 3, and 4. Estimated benefits are $0 in Year 1 and $80,000 each year in Years 2, 3, and 4. Use an 8 percent discount rate with the discount cost starts in effect at Year 1. Calculate the NPV, ROI, and year in which payback occurs.

Write a paragraph explaining whether you would recommend investing in this project based on your financial analysis.

2. Create a weighted scoring model to determine which project to select. Assume the criteria are cost, strategic value, risk, and financials, with weights of 15%, 40%, 20%, and 25%, respectively. Enter values for Project 1 as 90, 70, 85, and 50; Project 2 as 75, 80, 90, and 70; and Project 3 as 80 for each criterion. Use Figure 4-6 or slide...