Please **do not** attempt if you do not know what crystal ball is. Please answer __8__ questions and showing all work in excel sheet were required.. **Attach screenshots of crystal Ball Assumptions/simulations were required.**

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In addition to posting this answer sheet, be sure to post an **Excel file** that shows your calculations. You ** Must** post the file that includes your crystal ball assumptions, forecast and the results of your simulations. Post any MS Project file you used to answer a question.

- Two investments (A and B, below) have been proposed to the Capital Investment committee of your organization;
- The required rate of return for your company is 15%. What is the NPV for each investment? Assume the initial investments ($150k and $50k) occur at the beginning of the year and all other costs and benefits occur at the end of the year indicated. Ignore inflation.
- What is the payback period for each investment?
- Which investment would you recommend and why?
- Why might you recommend the other investment?

Investment A | Year 1 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |

Costs: | $150,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 |

Benefits: | – | $75,000 | $55,000 | $35,000 | $20,000 | $65,000 |

Investment B | Year 1 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |

Costs: | $50,000 | |||||

Benefits: | $30,000 | $15,000 | $10,000 | $10,000 | $15,000 |

- Unfortunately, the Capital Investment Committee refused to approve your recommendation (Problem 1) since you did not consider the uncertainty inherent in these types of investments. You pull out your very dog-eared notes and repeat your analysis, this time using Crystal Ball and the following information:

Investment A:

- Year 0 Investment cost: Triangular distribution (optimistic: $125,000; most likely: $150,000; pessimistic: $200,000)
- Year 1-5 operating cost: Normal distribution (mean of $5,000, standard deviation of $500)

- Year 1 Benefits: Normal distribution (mean of $75,000, standard deviation of $20,000)

- Year 2 Benefits: Normal distribution (mean of $55,000, standard deviation of $15,000)
- Year 3 Benefits: Normal distribution (mean of $35,000, standard deviation of $10,000)
- Year 4 Benefits: Normal distribution (mean of $20,000, standard deviation of $5000)

- Year 5 Benefits: Uniform distribution (Minimum: $60,000; Maximum: $120,000)

Investment B:

- Year 0 Investment cost: Uniform distribution (Minimum: $40,000; Maximum: $60,000)

- Year 1 Benefits: Normal distribution (mean of $30,000, standard deviation of $3,000)
- Year 2 Benefits: Normal distribution (mean of $15,000, standard deviation of $5,000)
- Year 3 Benefits: Normal distribution (mean of $10,000, standard deviation of $3,000)

- Year 4 Benefits: Normal distribution (mean of $10,000, standard deviation of $3,000)
- Year 5 Benefits: Normal Distribution (mean of $15,000, standard deviation of $5000).

- If the IRR is still 15%, use Crystal Ball to calculate the median NPV for each investment. Would you still prefer the same investment you recommended in question 1.c?
- What is the probability that Investment B will be better than Investment A (financially)?

Be sure to show all work.

- Using the forward and backward pass method, identify the Critical Path and total duration for the following network. Show all work.

Task | Duration | Predecessor |

a | 5 | |

b | 10 | a |

c | 10 | a |

d | 5 | b |

e | 3 | c |

f | 10 | d, e |

- For the network below:
- Assume that each activity has a Beta distribution. Calculate T-E and Variance for each activity. Assume the durations have 95% certainty (i.e. the range from optimistic to pessimistic durations covers 95% of all possible durations).
- Calculate the expected duration of the network. Do not use Crystal Ball.
- What is the probability the network will take no more than 23 days? Use the Z-table or Excel’s NORM.DIST formula,
__not__Crystal Ball. Be sure to show all work.

Activity | Optimistic Duration | Most Likely duration | Pessimistic Duration | T-E | Var | Pred |

A | 8 | 10 | 14 | |||

B | 4 | 5 | 7 | A | ||

C | 8 | 8 | 9 | A | ||

D | 3 | 3 | 3 | B, C |

- You are still trying to get your engineering cost estimate for the Kuraiz-Reconda Fiber Optic Cable (KRFOC) project approved by your sponsor (remember IA-5?). In opening your morning mail, however, you see a proposal from
*Engineers ‘R Us*to do all the KRFOC engineering for a fixed price of $60,000. Comparing that with your estimate of doing the work yourself (See the IA-5 question 2b__School Solution__): - What is the probability that the price for completing the work yourself will be less than the
*Engineers ‘R Us*offer? Show all work. - Would you recommend the work be done in-house or accept the fixed price offer from
*Engineers ‘R Us? Why or why not?*

Be sure to provide all calculations.

- Which of the following are activities and which are work packages?
- Project Plan
- Prepare the purchase order for a router
- System Design Package
- Install the foundation

- Larry, Moe and Curly decide to make a movie. Being graduates of the university, and having aced PMAN 635, they decide to build a project plan using MS Project. The attached file (Question 7- Fall 2019.doc) lists the activities and costs they think it will take to complete their movie.
__Note that there are two tables in this file__. Using MS Project, what is the total duration and cost for their project? Include your MSP project file with your submission.

- Please answer each of the following:
- What is the expected time to complete a task with an optimistic (a), most likely (m), and pessimistic (b) times of 2, 4 and 7 days respectively?
- What is the standard deviation of the same task, assuming that 99.7% of the outcomes fall between a and b?
- What is the standard deviation of the same task, assuming that 90% of the outcomes fall between a and b?

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