Electrical Engineering Question
An engineering firm realizes that a new machine will be needed in seven years. The new machine is expected to
cost $2,589,000, at current cost, however, the machine is very popular, and supply has been limited, therefore, the
price escalates by 5% each year. The firm expects interest rates to be 2.5% for the next seven years with no
variation anticipated. The Chief Engineer would like to know how much money the firm would have to accumulate
at the end of each year over the next seven years to be able to pay cash for the machine.
2. Project Denali has three tasks. Task A has a PV of $2,500, is 85% complete, and actually cost $2,169 so far. Task
B has a PV$3,258 is 78% complete, and actually cost $3,030 so far. Task C has a PV of $2,875, is 90% complete,
and actually cost $3,310 so far. The total budget is $8,633.
a. What is the Estimate at Completion (EAC) for the project?
b. What is the Estimate to Completion for the project?
c. What is the CPI for the project?
d. What is the SPI for the project?
3. You are the project manager for a very important e-learning project that will add 25 identical web portals for the
separate divisions of a large, international company. Although some differences in the web portals exist, for
planning and execution purposes, the portals are considered to be identical. The plan requires the entire team
working on and completing a web portal before beginning the next web portal. Your team has completed the
planning process and is in the middle of executing the project. Web portal priorities have been established and
agreed to by all stakeholders. Therefore, the most time critical web portals are started and completed first. Your
budget baseline allows $255,000 to complete each web portal. You are conducting a team progress review at the
end of the 15th week of the project. You find out that the Earned Value is$1,020,000 and the Actual Cost is
$1,189,000.
a. The team has been able to implement the plan with some difficulties. Based on the information provided,
how many web portals has the team implemented by the end of the 15th week?
b. What is the EV at the end of the 15th week?
c. What is the CV at the end of the 15th week?
d. What is the BAC?
e. Assume that the planned length of the project is 75 weeks. What is the Planned Value at the end of week
15?
f. What is the EAC at the end of the 15th week?
4. Find the Net Present Value for each of the projects listed below:
Project
Alpha
Project
Bravo
Project
Delta Project Echo
i 8.0% 9.2% 6.0% 9.8%
Compounded Annually Quarterly Monthly Annual
Initial
Investment (18,000) (42,000) (24,500) (128,655)
Cash Flows
(Years)
1 $18,756 $6,525 $3,850 $38,500
2 $18,756 $6,500 $3,850 $38,500
3 $18,756 $6,475 $3,850 $38,500
4 $18,756 $6,450 $3,850 $38,500
5 $18,756 $6,425 $3,850 $38,500
6 $18,756 $6,400 $3,850 $38,500
