Philadelphia University
Faculty of Information Technology
Department of Software Engineering
Examination Key
Lecturer: Dr. Samer O. Hanna
Internal Examiner: Dr. Mohammad Taye
Software Project Management (0721331)
Second Exam’s Key
Date: Wednesday 06/05/2015
Second Semester of 2014/2015
Time: 50 min.
Question 1:
(4 Marks)
1. Not all benefits can be quantified. Discuss three types of benefits relating to this statement (2
marks)
Benefits can be:
• Quantified and valued e.g. a reduction of x staff saving £y
• Quantified but not valued e.g. a decrease in customer complaints by x%
• Identified but not easily quantified – e.g. public approval for a organization in the locality where it
is based
2. What should be included in a programme mandate? Discuss (2 marks)
Initial planning document is the Programme Mandate describing
– The new services/capabilities that the programme should deliver
– How an organization will be improved
– Fit with existing organizational goals
Question 2:
(6 Marks)
Suppose that you are a project manager and you have the following estimated project cash flow:
Year
Cash Flow
0
-120,000
1
25,000
2
30,000
3
35,000
4
50,000
5
50,000
Evaluate this project according to a set of five criteria that you specify (use a ratio of 8%). (6
marks)
1. Net profit = 70,000
2. Payback period:
1
Year
Cash Flow
0
-120,000
Accumulated cash
flow
-120,000
1
25,000
-95,000
2
30,000
-65,000
3
35,000
-30,000
4
50,000
20,000
5
50,000
70,000
Payback period = 3.5 Years
3. Return On Investment (ROI)
 70,000 
5
 100  11.67%
ROI = 
120,000
4. Net Present Value (NPV)
Year
Cash Flow
Discounted factor
0
-120,000
1
Discounted cash
flow
-120,000
1
25,000
0.9259
23,147.5
2
30,000
0.8573
25,719
3
35,000
0.7938
27,783
4
50,000
0.7350
36,750
5
50,000
0.6805
34,025
NPV = 27,424.5
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5. Internal Rate of Return (IRR)
Find r that satisfies the following equation:
 120,000 *
 50,000 *
Question 3:
1
1 r 
0
1
1 r 
5
 25,000 *
1
1 r 
1
 30,000 *
1
1 r 
2
 35,000 *
1
1 r 
3
 50,000 *
0
(6 Marks)
For the Software Project assigned to you in this course, apply Step Wise’s step 4 to step 7 for this project
Solution:
The answer to this question depends on the project assigned to each student’s groups in the course.
Step 4 to step 7 will be applied to psychometric test project.
Step 4 Identify project products and activities
4.1 Identify and describe project products - ‘what do we have to produce?’
a. Product Breakdown Structure (PBS)
b. Product description (PD)
• Product identity
• Description - what is it?
• Derivation - what is it based on?
• Composition - what does it contain?
• Format
• Relevant standards
• Quality criteria
Selected Subjects:
Id: 1
Description: They are the employees that will try the system
Derivation: It is part of testing arrangements.
….
3
1
1 r 
4
c. Product Flow Diagram
Step 4.3 Recognize product instances
4.4. Produce ideal activity network
Step 4.5 Add check-points if needed
Step 5:Estimate effort for each activity
Plan testing needs two days and one tester
Select subjects needs one day and one tester
etc.
Step 6: Identify activity risks
System is not completed on time
System exceeds its budget
etc.
Step 7: Allocate resources
Identify and allocate resources to activities
Question 4:
(4 Marks)
Suppose that you are the manager that is responsible for extending the invoicing system of a company
XYZ. An alternative would be to replace the whole of the system. The decision is influenced by the
likelihood of XYZ expanding their market. There is a strong rumour that they could benefit from their
main competitor going out of business: in this case they could pick up a huge amount of new business,
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but the invoicing system could not cope. However replacing the system immediately would mean other
important projects would have to be delayed.
The (Net Present Value) NPV of extending the invoicing system is assessed as 65,000 JD if there is no
sudden expansion. If there were a sudden expansion (probability is 0.30) then there would be a loss of
100,000 JD. If the whole system was replaced and there was a large expansion there would be a NPV of
200,000 JD due to the benefits of being able to handle increased sales. If sales did not increase then the
NPV would be
-50,000 JD.
1. Draw the decision tree that you will use to solve the above problem. (3 marks)
2. Would you extend or replace the invoice system according to the decision tree in 1? (Justify). (1
marks)
1.
2.
Extend  (65,000 x 0.7 – 100,000 x 0.3) = 45,500 – 30,000 = 15,500
Replace  (150,000 x 0.3 – 40,000 x 0.7) = 45,000 – 28,000 = 17,000
We go with replacing the system.
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