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For the NLD above, the activity durations and costs are as follows: Activity ID Normal Time (days) Crash Time (days) Total Normal Cost ($) Total

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For the NLD above, the activity durations and costs are as follows:

Activity

ID

Normal Time

(days)

Crash Time

(days)

Total Normal Cost

($)

Total Crash Cost ($)

Start

0

0

0

0

A

20

8

1,000

1,480

B

24

20

1,200

1,400

C

14

7

700

1,190

D

10

6

500

820

E

11

5

550

730

Finish

0

0

0

0

Using the above information:

    1. Determine the crash cost for each activity. Determine the maximum possible crash time for the network and crash the network the maximum possible. (15 marks)
    2. Compute the normal project cost and the cost of the crashed project. (5 marks)
    3. If the maximum indirect cost savings to the project where $250/day for every day saved, what would the cost of the crashed project be and the maximum possible crash time for the network? (5 marks)
  1. Using an hurdle rate of 6%, and an investment of $78,000, use the following cash flows to determine, IRR, NPV and Payback Period. The companys policy states all 3 must be considered viable for a project to be considered. What are the values and would you ok the project? (15 marks)

Year

Cash Flow

1

$15,000

2

$25,000

3

$17,000

4

$25,000

5

$18000

D Start B Finish C E D Start B Finish C E

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