Question #1: Using the following data:
Fixed Factory Overhead Costs: $63,000, Variable Manufacturing costs per unit: $30, Variable labor per unit: $5, Fixed Selling Overhead costs: $10,000, Variable Selling Cost per unit: $3, Fixed Labor cost: $5,000, Fixed utilities: $4,430, Selling Price: $500. Required profit of $12,000 is needed to move forward.
A) If the Break Even is negative should you move forward? What are your alternatives?
Question #2: Present Value (PV) & Net Present Value (NPV)
A) Should you invest in the Jim Shorts Gym Shoe new payroll system based on the following data? Please explain your answers.
· The new system will reduce the overall cost for the organization.
· The new payroll system will cost $120,000
· The organization will save $50,000 for the next 4 periods
· The discounted rate is 10%
Calculate the PV and NPV – Show your work
B) Evaluate the 3 alternative systems below. Calculate the NPV for each system. Based on the NPV which system should you select and why?
Question #3: Project Financials
You are the project manager and your boss has asked you to provide a status-based project earned value management. You are managing a project that is creating Webpages. You have a budget of $200,000. Each webpage is expected to cost $10,000 and you are producing 20 Web Pages. Your duration of the project is scheduled for 20 weeks. At week 10 you have only produced 8 webpages. You should have produced 10 of the 20 at this point. Your actual cost is $90,000 and your planned value at this point in the project is $100,000. Please update the chart below with the correct information.
· Budget (BAC) = $200,000
· Duration = 20 weeks (Deliver 1 page per week)
· Actual Cost = $90,000
· Planned Value at this point in the project = $100,000 (Planned % complete * BAC)
Earned Value management
Values
Budget at Completion
Actual Cost (AC)
Duration
Planned Value (PV)
Earned Value (EV)
SPI
SV
CPI
CV
EAC
VAC
ETC
A) Will you finish the project on time? If not, what can you do to mitigate the variance?
B) Are you on track to meet the budget? What is the current variance at week 10? What do the numbers show will be the variance at the end of the project?
System ASystem BSystem C
Initial Cost 35,000$ 45,000$ 55,000$
CF Year 1 10,000$ 10,000$ 10,000$
CF Year 215,000$ 16,000$ 18,000$
CF Year 310,000$ 20,000$ 25,000$
CF Year 411,000$ 15,000$ 20,000$
r10%
Calculate PV and NPV
3 Investment alternatives
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