Finance

1. Solve problem 25, page 35 of Mantel.

a. What is the expected NPV of the project?

b. What is the range of NPVs

c. How would you characterize the level of risk associated with this project?

d. Would you recommend undertaking this project?

Submit the results of your Crystal Ball analysis

2. Do problem 17, page 140 of Mantel. Submit all work.

Q3. Solve problem 27, page 182 of Mantel.

a. Find the expected time and variance for each task.

b. Draw the network (either AOA or AON) and the critical path and time. You may use MS Project or draw it manually. In either case, highlight or name the critical path and state the duration.

c. Find the probability that the critical path will be completed in 23 weeks

d. What is the probability that the other main paths will be completed in 23 weeks?

e. If the paths are independent, what is the probability that the entire network will be completed in 23 weeks?

SOLUTION:

a) Expected time and Variance is calculated in the Excel file attached.

b) The AOA network is drawn below:

(c ) (d) and (e) done in the Excel Spreadsheet

Q4. Solve problem 23, page 233 of Mantel (be sure to read the entire problem). Note that your choice is only between activities d and c.

a. Minimum slack:

b. Most followers:

c. Most critical followers:

d. Shortest task first:

e. As late as possible:

Q5. Solve problem 25 on page 265 of Mantel.

f. CV

g. SV

h. SPI

i. CPI

SOLUTION:

According to the Question,

Earned Value (EV) = $272,000

Actual Costs (AC) = $270,000

Planned Value (PV) = $261,000

We know that:

Cost Variance (CV):

CV = EV – AC

Cost variance = $272,000 – $270,000 = $2,000

Schedule Variance (SV)

SV = EV – PV

Schedule variance = $272,000 – $261,000 = $11,000

Cost Performance Index (CPI)

CPI = EV / AC

CPI = 272,000/270,000 = 1.01

Schedule...