Organizations often find it useful to classify various potential projects by type to determine the level of acceptable risk, cost, and business disruption in balance with the potential payoff in advantages over the competition.

Identify which project type is illustrated in each scenario.

Mandatory

Janey works with her team to develop a new encryption algorithm that is resistant to any currently known hacking techniques.

Maintenance

Chad comes into the office over the weekend to manage the installation of a system update that will enable users to access updated operating system features.

Breakthrough

Keller is overseeing the conversion of paper$-$based medical records to HIPAA$-$compliant EHRs $($electronic health records$).$

Innovation

Kierstin adds the ability to accept cryptocurrency to her restaurant's mobile ordering app.

The cost of a project includes all the capital expenditures, operating expenses, and internal cross$-$charges associated with the project$$s buildings, operation, maintenance, and support. These costs are classified according to whether the cost is short$-$term, ongoing, or depreciated over time. While companies might need accounting advice to accurately classify some ambiguous costs, in general, a project manager can anticipate which costs will be categorized as a capital expenditure and which are classed as operating expenses.

Identify the type of cost described in each scenario.

Operating

expenses

Dana buys three prime advertising spots during the broadcast of a highly anticipated sporting event.

Capital

expenditures

Max pays an attorney to update his company's standard vendor contract to reflect some recent changes in relevant laws.

Victor hires a contractor to renovate the lobby and receptionist areas of his office building.

Toni purchases three new service vans for her plumbing business and has to pay for the vans to be delivered from out of state.

You own a small engineering company that is being hired by a major construction company to complete a hydrological study before road construction for a new highway can begin. You$$re discussing the project parameters with the construction manager, who is in contact with the government$$s oversight committee, property owners in the area of the proposed roadway, sub$-$contractors of all types, and the workers$$ union representatives.

Construction manager:

We're on a tight schedule, as you can imagine. And everything is hinging on the results of these reports. Do you think you'll hit your projected deadline?

You:

Our company places a high priority on effective

Select

management to ensure we can adequately forecast costs and work schedules. Any changes at this point would most likely only be due to approved, desirable changes. So yes, we're on track to hit our deadline.

Construction manager:

I$\text{'}$m glad to hear that. Your study falls along the project's critical path, and there's very little slack time built in for this phase of the project. Any thoughts yet on how best to reinforce the stream's bank along mile marker $58?$

You:

We've actually brought in a

Select

to consult on that part. There's some tricky drainage in that area during heavy rainfall.

Construction manager:

That's good to know$$that will help during my next meeting with area residents.

You:

You've had a lot of those lately. I$\text{'}$m glad this project has allowed for a heavier emphasis on

Select

to better incorporate feedback from residents.

Nikolett works for a boutique technology firm that specializes in developing innovative solutions to larger companies$$ technology$-$based headaches. She is currently working on a project for a client that will address some serious inefficiencies in their supply chain logistics$.$ However, her client$$s executive board has expressed concerns about how any solution could be designed to address these problems because so many different vendors and suppliers are involved. They don$$t want to lose business relationships while working to solve problems and increase efficiency.

What kind of innovative solution should Nikolett aim for to address the company's problems without alienating their business partners?

a$.$ Disruptive

b$.$ Growth

c$.$ Radical

d$.$ Sustaining

Despite their desire for a palatable solution, Nikolett's client does not want the solution's implementation to drag out for months or years. What change approach will best fit this client's needs?

a$.$ Continuous improvement

b$.$ Cultural

c$.$ BPR

d$.$ Kaizen

Nikolett's company has proposed a solution that will address all of her client's major concerns. However, she warns that there will be a bit of a learning curve as employees and business partners learn how to use the solution and incorporate it into their own workflows. What factor can Nikolett emphasize with these users to help increase their openness to engaging with this learning process?

a$.$ Perceived usefulness

b$.$ Organ