As a project manager, you are required to select one IT project between below mentioned projects based on NPV value. Decide which project you will select and why? Provide complete work of NPV calculation.

Project 1. Total duration of the project is 5 year, the company will receive some payments as per schedule given below.

Hint: compute the year wise expense first.

compute investment from salaries

discount rate is 8%

Team:

c. 1 project manager (PM) working at 50% of her time for the whole duration of the project (monthly fee: Rs. 50,000 );

d. 2 analysts working at full-time for 2 calendar months in each year on analysis and requirements (monthly fee: Rs. 40,000 );

e. 4 programmers working at 50% of their time for 36 calendar months on the remaining phases of waterfall (design, implementation, testing, and deployment)

(monthly fee: Rs. 30,000 );

f. 1 maintenance engineer for the 24 calendar month to provide support to the client organization. (monthly fee: Rs.25000)

g. Company will receive payment of 0.6 million (m) by the end of year 1, 0.8 by the end of year 2, 1.0 by the end of year 3, 1.3 m by the end of year 4 and 2.0 m by the end of year 5.

Project 2. Total duration of the project is 6 year, the company will receive some payments as per schedule given below.

Hint: compute the year wise expense first.

compute investment from salaries

discount rate is 8%

Team:

a. 1 project manager (PM) working at 50% of her time for the whole duration of the project (monthly fee: Rs. 70,000 );

b. 2 analysts working at full-time for 2 calendar months in each year on analysis and requirements (monthly fee: Rs. 50,000 );

c. 5 programmers working at 50% of their time for 36 calendar months on the remaining phases of waterfall (design, implementation, testing, and deployment)

(monthly fee: Rs. 40,000 );

d. 1 maintenance engineer for the 24 calendar month to provide support to the client organization. (Monthly fee: Rs. 35000)

e. Company will receive payment of 0.7 m by the end of year 1, 0.9 by the end of year 2, 1.3 m by the end of year 3, 1.8 m by the end of year 4, 2.3 m by the end of year 5 and 2.6 m by the end of year 6.