Team 5 Ryan Murphy Theodore “Rob” Compton Vanessa Gonzales January 14, 2024 Week 1 Exercises Benedictine University MNGT 6601 Project Management Chapter 1 Exercise 1-Vanessa Gonzales The following instructions supersede what is listed in the textbook (p20). Please find 3 projects in your local newspaper, list the three projects and explain (In 3 - 5 sentences) why you believe they are projects using the information from chapter 1 in your textbook. Project 1- Teen organizes soccer gear donations for kids in Costa Rica Brief overview of the project: Virginia teen who often travels to Costa Rica with family took notice of the kids playing competitively were not playing with appropriate gear. He then asked his own coach for old, retired gear to donate to the kids in Costa Rica and was granted his request. He and his family are traveling back to Costa Rica this month to deliver all the donated items. Project 2- Phoenix Police hosting ‘Superhero Saturday’ charity event Brief overview of the project: The City of Phoenix police department hosts its 5th annual superhero, comic, cosplay, car show charity event. The event itself is free for the public to attend but any proceeds go to non-profit Childhelp. Project 3- ASU to build new medical school in downtown Phoenix Brief overview of the project: ASU to build its third medical/health related building in downtown phoenix that will offer advanced medical engineering. Each one of these projects range from big to small but each one has moving pieces. From beginning to end, each project takes thought, planning, prepping and delivering. Each one of these projects are not routine or repetitive work. Every project will require unique skills, needs and demands as the project flows from start to finish. 2 Chapter 2 Exercise 2 – Theodore “Rob” Compton When comparing the two software projects proposed at a young, start-up company utilizing the payback method, the Alpha project is better from a cash flow standpoint. While both companies have similar payback periods and rates of return. Project Alpha has a payback period of 3.75 years compared to Project Beta which has a payback period of 4 years, resulting in the initial investment being earned back a quarter earlier for Project Alpha due to having a rate of return ~2% higher. While Project Beta presents larger annual savings, Gray and Larson mention that shorter paybacks for projects are more desirable (2021). 3 Chapter 2 Exercise 3 – Ryan Murphy The excerpt below restates the second assigned question from Chapter 2. “A five-year project has a projected net cash flow of $15,000, $25,000, $30,000, $20,000, and $15,000 in the next five years. It will cost $50,000 to implement the Project. If the required rate of return is 20 percent, conduct a discounted cash flow calculation to determine the NPV.” (Gray & Larson, 2021) Net Present Value (or NPV) is a valuable tool for program assessment primarily because it considers the time-value of money. While this exercise doesn’t use the method to compare projects as in the last problem, it does provide an example of NPV applied as an evaluation tool. Given the values above, we know that the initial investment (I0) is $50,000, the net cash inflow (Ft) is provided in the above text, the required rate of return (k) is 20$, and the number of years (n) is 5. The chart below visualizes this expression, leveraging the NPV function in Microsoft Excel to simplify calculations. The discounted cash flow calculation resolves the NPV as positive $12,895 and meets the minimum required rate of return. 4 References Gray, C. F., & Larson, E. W. (2020). Project management: the managerial process. McGrawHill Education. Gray, C.F. & Larson, E.W. (2021). Project Management: The Managerial Process (8th Ed.). New York: McGraw-Hill. Staff, A. (2024, January 8). Teen organizes soccer gear donations for kids in Costa Rica. https://www.azfamily.com. https://www.azfamily.com/2024/01/08/teen-organizes-soccergear-donations-kids-costa-rica/ Staff, A. (2024b, January 11). Phoenix Police hosting ‘Superhero Saturday’ charity event. https://www.azfamily.com. https://www.azfamily.com/2024/01/11/phoenix-police-hostingsuperhero-saturday-charity-event/ Staff, A. (2023, October 19). ASU to build new medical school in downtown Phoenix. https://www.azfamily.com. https://www.azfamily.com/2023/10/19/asu-build-new-medicalschool-downtown-phoenix/ 5
