October 3, 2013

INF3708

2013 - Semester 2

Assignment 01 – Solutions

(Note: Page numbers refer to in Q1 – Q15 refer to the prescribed textbook: Bob Hughes and Mike Cotterell,

2009. Software project Management – Fifth edition. McGraw-Hill (London). ISBN: 9780077122799)

Q1.

Q2.

Q3.

Q4.

Q5.

Q6.

Q7.

Q8.

Q9.

Q10.

Q11.

Q12.

Q13.

Q14.

Q15.

4

3

4

2

1

1

4

3

4

4

5

5

5

1

5

(p5)

(p2)

(p83)

(p82)

(p85)

(p82)

(p84)

(p11)

(p55)

(p60)

(p8)

Question 16

Answer = 3

Net profit is the difference between the total costs and the total income over the life of the project.

((-155 000) + (-5 000) + 40 000 + 50 000 + 50 000 + 50 000 + 30 000) = R60 000

Question 17

Answer = 4

Net profit is the difference between the total costs and the total income over the life of the project.

((-140 000) + 15 000 + 5 000 + 20 000 + 30 000 + 60 000 + 70 000) = R60 000

Additional information about net profit: advantage as method for comparing projects – simple to calculate disadvantage as method for comparing projects – takes no account of timing of cash flows

@UNISA 2013 | Revise and ensure that you have the full understanding of question 16 to question 24: Very IMPORTANT

1

[INF3708 TUTORIAL LETTER 201]

October 3, 2013

Question 18

Answer = 2 (i.e., 4 + (20000/50000) = 4.4 yrs) OR (5 - (30000/50000) = 4.4 yrs)

Payback is the time taken to break even or pay back the initial investment

Year

0

1

2

3

4

5

Project 1

-R155 000

-R5 000

R40 000

R50 000

R50 000

R50 000

Calculations for pay back period

- R155 000

(- R155 000) + (- 5 000) = - 160 000

(-160 000) + 40 000

= - 120 000

(-120 000) + 50 000

= - 70 000

(- 70 000) + 50 000

= - 20 000

(- 20 000) + 50 000

= 30 000

Question 19

Answer = 4 (i.e., 5 + (10000/70000) = 5.14 yrs) OR (6 - (60000/70000) = 5.14 yrs)

Payback is the time taken to break even or pay back the initial investment

Year

0

1

2

3

4

5

6

Project