Q8 Ans:There are three main areas to estimate before your projectstarts--effort, duration, and cost.

Of the three, you must estimate effortfirst to understand the total amount of work. The duration can be estimatedonce you have the effort and the resources that you can apply. For example, ifyou have a project that you are estimating to be 800 effort hours, the durationwill depend on the resources that you can apply. If you only have one person,the duration might be six months. If you have three people, the effort might bethree months or less. Once you understand the resources that you can apply to theproject, you are in a position to create the cost estimate. At a high-level,project costs are estimated by looking at labor and non-labor items. Labor costs The cost of labor is derived by looking at the effort hoursof each resource and multiplying by the hourly cost of each resource. External If you are using external contract or consulting resources,the costs always needs to be estimated and budgeted. You have to determine thetype of external resources you need and the hourly rate of the resources. Ifthe final staffing has not been determined and you are not sure the actualresource cost, you need to make some assumptions based on the general type ofresource you need. For instance, there may be a standard hourly cost (or astandard range) for accountants, programmers, office administrators, etc. Internal Calculating the costs of internal employees varies fromcompany to company. In many companies, estimated labor costs for internalemployees are assumed to be zero, since their costs are already accounted forin a departmental budget. This does not imply there is no cost. Rather, itassumes there are no incremental costs over and above what the company isalready paying for. In other companies, you may have an average hourly cost peremployee that you need to account for in your project budget. Sometimes this isa general average cost per hour for all employees. Sometimes companies try toget a little more sophisticated by calculating different hourly costs based onthe role. In other words, a project manager would have a different internalrate than a programmer. Non-labor costs Non-labor costs include everything not directly related tosalary (and benefits) and contractor costs. Some of these costs, like trainingand team-building expenses, are related to people. However, they are stillconsidered non-labor since they are not related to employee salary orcontractor hours. Each project manager must be aware of the accounting rules inhis or her own company to make sure the labor and nonlabor costs are allocatedcorrectly. Generally, however, non-labor costs include:
y y y y y y

Hardware and software Equipment Material and supplies Travel expenses Training Team building

Facilities In addition, if you outsource parts of your project, thesecosts are usually considered non-labor. This makes sense since you're usuallypaying for deliverables and you're not worried about the vendor costs forlabor. That's up to the vendor to worry about. When creating your estimate for project costs, take intoaccount the resources that will work on your project, the estimates cost perresource, as well as all non-labor and outsourcing costs. These should give youa total picture of the anticipated costs of the project.

Q10 Ans: Profitability ratios

Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return Gross margin, Gross profit margin or Gross Profit Rate[7][8]

OR

Operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS)[8][9]

Note: Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT and operating profit.[10] This is true if the firm has no non-operating income. (Earnings before interest and taxes / Sales[11][12]) Profit margin, net margin or net profit margin[13]

Return on equity (ROE) [13]

Return on investment (ROI ratio or Du Pont Ratio)[6]

Return on assets (ROA)[14]

Return on assets Du Pont (ROA Du Pont)[15]

Return on Equity Du Pont (ROE Du Pont)

Return on net assets (RONA)

Return on capital (ROC)

Risk adjusted return on capital (RAROC)

OR

Return on capital employed (ROCE)

Note: this is somewhat similar to (ROI), which calculates Net Income per Owner's Equity Cash flow return on investment (CFROI)

Efficiency ratio

Net gearing

Basic Earnings Power Ratio[16]