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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 ($) Total
For the NLD above, the activity durations and costs are as follows:
Activity ID | Normal Time (days) | Crash Time (days) | Total Normal Cost ($) | 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:
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- 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)
- Compute the normal project cost and the cost of the crashed project. (5 marks)
- 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)
- 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 |
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