Answer 1

Discount Rate 12% P1 P2

Hourly Rate $52 Calender Project Expense Report

Discount Developm Development Inflow-Year

rate ent Time Cost Outflow 1 Inflow-Year 2 Inflow-Year 3
P1 -10% 1250 $65,000 ($65,000) $750,000 $675,000.0 $607,500.0
P2 5% 400 $20,800 ($20,800) $250,000 $262,500 $275,625

P3 5% 750 $39,000 ($39,000) $500,000 $525,000 $551,250

P4 10% 2500 $130,000 ($130,000) $1,000,000 $1,100,000 $1,210,000

P5 15% 1875 $97,500 ($97,500) $2,500,000 $2,875,000 $3,306,250
P6 5% 6250 $325,000 ($325,000) $1,300,000 $1,365,000 $1,433,250

Total Utilized hrs are 9775 out of 10000 hrs.

We have to leave projects 3 & 4 because of only 10000 hrs available and at

Answer 3
Whether to add another S/W developer?

If we add one more S/W developer, then we have additional 2500 hrs. After Project 2, the tot
Since Project 4 had the next higher NPV but previously it was not taken because at that time t

Thus another S/W developer can be added.

 P3 P4 P5 P6
Trip
Portfolio Tracker spreadsheet Web Browser Planner

Ranking as Ranking as per available hrs

per NPV and NPV starting with highest
(What it to lowest utilizing 10000
should be) available hrs. (What
actually it is)
NPV Ranking
$1,406,388.59 4 8125+1250=9375 hrs 3
$542,734.03 6 9375+400=9775 hrs 4
10,125 (can't select because
$1,087,789.48 5 the hrs exceed 10000)
10,625 (can't select because
$2,233,057.60 3 the hrs exceed 10000)
$6,053,480.98 1 1875 1
$2,628,609.79 2 1875+6250=8125 hrs 2

00 hrs available and at the same time utilize most of the available hrs.

. After Project 2, the total consumed hrs are 8125 and available hrs are 12500 (10000+2500(new))
n because at that time the available hrs were only 10000. Now we can take the Project 4.