College of Business and Technology, Morehead State University Exam 1 Hands-On Part
IET 320 Project Management (Spring 2016) Read the instructions carefully to complete this exam. A project manager in an organization analyzed some alternative options for a project. Option A initially requires
$600,000, and is expected to generate cash inflows as follows. Expected benefits Year 1
$300,000 Year 2
$250,000 Year 3
$200,000 Year 4
$150,000 Option B requires $700,000 initially and is expected to produce cash inflows as follows Expected benefits Year 1
$200,000 Year 2
$200,000 Year 3
$200,000 Year 4
$180,000 Year 5
$180,000 Year 6
$180,000 The president of the organization wants to know which option is more economical.
Assume that you are the project manager who needs to evaluate the options with financial models or
techniques such as net present value, internal rate of return, net annual worth, payback period, etc. The
relevant market interest rate is 14% annually, and interests are calculated at the end of each period (i.e., at the
end of each year).
Create an electronic spreadsheet file (e.g., Microsoft Excel) to complete the analysis with the information given.
Save the file as Exam01YourName.xlsx (e.g., Exam01TomJones.xlsx if your name is Tom Jones) and submit the
file to the Blackboard course website.
The exam will be evaluated based on the following:
Category
Precision
Flexibility
Relevancy
Total Description
The numbers and formulas are correct
Formulas/functions are used appropriately
Decisions are relevant. Scores
20
20
10
50 This exam should be submitted to the Blackboard course website by the end of February 19, 2016.
