Using The Cv And Sv Calculations Can Be Misleading

Estimate the project’s operating cash flows for each year of the project’s economic life. (Hint: Use Table 2 as a guide)

Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.

The projected costs in the last six months of 2004 (column 4) are calculated by subtracting the actual costs for the first five months of 2004 (column 2) from 2004’s projected total costs (column 3). This gives us the projected costs for the last seven months of 2004. However, we are only interested in the last six months of 2004, so

Project A: This project is new to your company. You do not feel confident in estimating the project costs using internal resources. There are other companies that have done this type of work. Yet you still want the most accurate estimates possible.

592 Week 1 DQ 1 WBS Construction PROJ 592 Week 1 DQ 2 Project Cost Estimates and Assumptions PROJ 592 Week 2 DQ 1 Cost Components PROJ 592 Week 2 DQ 2 Estimating Processes PROJ 592 Week 3 DQ 1 Project Schedules PROJ 592 Week 3 DQ 2 Sensitivity Analysis PROJ 592 Week 4 DQ 1 Resource Allocation and Leveling PROJ 592 Week 4 DQ 2 Advanced Schedule Techniques PROJ 592 Week 5 DQ 1 Earned Value Calculation PROJ 592 Week 5 DQ 2 Project Monitoring and Control & EV PROJ 592 Week 6 DQ 1 Forecasting Project Completion Cost PROJ 592 Week 6 DQ 2 Project Control PROJ 592

The project manager is under budget but behind schedule. He/She should spend some of their savings getting more resources to put them back on schedule.

3. Post the file from the same page where you accessed this Assignment, using the

- Cost Variance (CV): The Cost Variance indicates a value which is a measure of how much the project is either overspent or underspent at any given point in time. For any given point in time, once the EV and AC are known the CV can easily be calculated. The formula for CV is quite simply: CV = EV – AC. Here a positive value indicates that the project is under spent at the current point in time and a negative value would indicate the opposite that a project is over spent at the current point in time. The Cost Variance at the end of the project is calculated as follows: CV = BAC – AC. The same above rationale is applied to positive and negative numbers to indicate if the project is under spent or over spent respectively.

We used PV (planned Value), AC (actual cost), and EV (earned value) to calculate SPI (schedule performance index), SV (schedule variance), CPI (cost performance index), and CV (cost variance). Among these indicators, SPI and SV show whether a project is behind schedule or not, and CPI and CV indicate whether a project is under budget. Therefore, the statuses of the schedule and cost of technical infrastructure, software customization, and combined projects can be easily and clearly checked, respectively.

‘’Cost performance on project s often poor, what are the possible causes of this and how can it be improved?’’

A variable department manager has many factors to consider when interpreting and analyzing a variance report. Variances can be attributed to factors such as increased or decreased volume, wage increases, cost increases for equipment and cost increases for supplies. Variance reports are a tool that can be utilized to analyze how well a company is doing with meeting current budgetary goals as well as a means for forecasting information for future budgets. In preparing a variance analysis report to be presented to the vice president, the information needs to be simple enough to understand easily, but detailed enough for the information to be useful to

For the each project, the SOW should detail the task and deliverable and it should be summarized in the Cost Worksheet. For instance, the project APPS system enhancements has three (3) taks/deliverables and the term is 10/16/17-04/15/20. The SOW should clearly describe in details the tasks & deliverables and once the vendor complete each deliverable, the vendor will get paid. Below is a summary table for task/deliverable that used for a new system. I also will modify DOJ’s Cost Worksheet as the picture below.

During the evening, she spent several hours studying the operating expense categories, eventually preparing Exhibit 3, which showed budgeted operating expenses by category and her judgment about their degree of variability. She also listed the actual operating expenses for the period on the exhibit.

Placing the events in a Gantt chart will help clarify and organize the events, the order in which they will occur, as well as any preceding activities that must be accomplished. Table 5 shows the project 's normal conditions, their timeframes and associated costs. As noted, normal conditions require 50 weeks to complete and therefore, cannot be used. Table 6 is a similar chart showing the project under ultimate crash conditions. As mentioned earlier, the project can be accomplished in as little as 42 weeks if every activity is crashed. This scenario is not desired however, because the project 's budget then approaches $5 million in associated costs, over 50% beyond the original allotted expenditure.

It must be taken into account that all these three products which are Alpha, Beta, Gamma and Delta are going to be processed through specification of design, code and test. The period of time which is set for this project is 99 days this detail is taken from the date of 1 st of September 2015 to Friday 15th January 2016.we found that 4 days must be removed out from 99 days due to the official holidays. Therefore, the length period of time for the project is going to be 95 days’ period. The human resources available in the team is five people including the manager.