CTS 115 Chapter 10

6. Although you are basically satisfied with the analysis thus far, you are concerned about the

3. Estimate the project’s NPV. Would you recommend that Tucker Hansson proceed with the investment?

Budgets and Planning. To begin with, the program, like the organization, fosters an open and collaborative environment for the process to take place. In this regard, it is, therefore, impossible for any one space or environment to be able to accommodate every conceivable project or application that is “thought up”. Therefore, certain perimeters and guidelines need to be established to assess costs with the program and help determine a course of action in future planning. As we are discussing costs, we assume there is a

If the project required additional investment in land and building, how would this affect your decision? Explain

5. Limits and exclusions – Sticking to the developed design and requirements of the project. Late changes in design will not be taken into consideration.

Leading managed IT service providers already have these setups and they already have trained professionals, who are taking care of similar needs

Based on these observations, it is clear that the most affordable option would be the mobile application. For this option, all that is required is paying one developer per year (variable cost), as well as a network engineer for the first time (fixed cost). For the other two options, it is required to pay multiple officers and security guards per year (variable costs), which is heavy. Therefore, for this criterion, the mobile application option wins.

The investor would also have to look at the risk factor attached to the investment, for example you might put in 100 shares worth $300 but you could only get $200 as a return from that investment. But you could also get a much larger return from the investment. You have to analyse the risk and make a decision from that. You would have to understand the behaviours of the competing companies, as their success could be the determining factor towards your invested companies failure.

Developing a good cost estimate is difficult. There are several tools and techniques available to assist in creating them. Four of the commonly used tools and techniques are analogous cost estimating, bottom-up estimating, parametric modeling, and using computerized tools.

project plus the cost of any software or tools required. In the newer approach, known as a fixed price

Once the appropriate information has been collected and analysed, different forms of investment appraisal can be conducted. Here the client will be able to assess the viability of the investment proposal. There a number of different methods that can be used to do this. They include the; internal rate of return, net present value and payback period of the proposal (Horngren et al, 2012). These methods will assist the client in deciding if they should accept or reject the project.

Abstract- In today’s competitive world, apart from a few isolated cases (e.g. luxury goods), the selling price of a product is predefined by the market because customers are not willing to pay more than a certain amount of money for the product. Hence cost is one of the most influential factors in the outcome of a product or service. Hence over the past years different costing techniques are evolved such as operation based approach, case based, break down approach, feature based costing, Activity based costing, time-driven activity based costing etc. These techniques are classified based on techniques with similar features. They are mainly classified into qualitative techniques and quantitative techniques. Qualitative cost estimation techniques are based on a comparison analysis of a new product with the products that have been manufactured previously in order to identify the similarities in the new one. Whereas the quantitative techniques are based on a detailed analysis of a product design, its features, and corresponding manufacturing processes. Therefore quantitative techniques are more preferred. Time-driven activity based costing is a relatively new tool based on quantitative technique.

Time also act as factor that drives the cost estimation. The project timelines should be defined in advance so that the cost can be driven on basis of resource alignment. The timeline should be ascertained in form of milestone tracking and there should be regular update to be shared on basis of it.

Investment is a key part of building your business. New assets such as machinery can boost productivity, cut costs and give you a competitive edge. Investments in product development, research and development, expertise and new markets can open up exciting growth opportunities. At the same time, you need to avoid overstretching limited financial resources or restricting your ability to pursue other options. Deciding where to focus your investment is an essential part of making the most of your potential. Even a project that is not designed to generate a profit

,400,000.00 7,300,000.00             - 150,000.00 200,000.00 225,000.00 250,000.00 250,000.00 100,000.00 160,000.00 180,000.00 560,000.00 600,000.00 640,000.00 Cost of overheads Cost of system maintenance and firewalls 300,000.00 420,000.00 490,000.00 560,000.00 600,000.00 640,000.00 60,000.00 120,000.00 130,000.00 140,000.00 150,000.00 160,000.00 Cost of hardware expansion - 260,000.00 300,000.00 340,000.00 380,000.00 400,000.00 Cost of training 500,000.00 800,000.00 900,000.00