Chapter 5 – Exercise 1

Use PowerPoint, Visio or similar software to create a WBS in chart form (similar to an organizational chart – see the example in Figure 5-2). Assume the level 1 categories are initiating, planning, executing, controlling and closing. Under the executing section, include level 2 categories of analysis, design, prototyping, testing, implementation, and support. Assume the support category includes level 3 items called training, documentation, user support, and enhancements.

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This form of the WBS gives a very good visual representation of the work involved at each level and the relationships between levels.

Chapter 4 – Exercise 4

Create a weighted scoring model to determine grades for a course. Final grades are based on three exams worth 15%, 20% and 25%, respectively; homework is worth 20%; and a group project is worth 20%. Enter scores for three students. Assume Student 1 earns 100% (or 100) on every item. Assume Student 2 earns 80% on each of the exams, 90% on the homework and 95% on the group project. Assume student 3 earns 90% on Exam1, 75% on Exam 2, 80% on Exam 3, 90% on the homework and 70% on the group project. You can use the weighted scoring model template, create your own spreadsheet, or make the matrix by hand.

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Chapter 4 – Exercise 3

Perform a financial analysis for a project using the format provided in Figure 4-3. Assume the projected costs and benefits for this project are spread over four years as follows: Estimated costs are $100,000 in Year 1 and $25,000 each year in Years 2, 3 and 4. Use an 8% discount rate. Create a spreadsheet (or use the business case financials template provided on the companion Web site) to calculate and clearly display the NPV, ROI and year in which payback occurs. In addition, write a paragraph explaining whether you would recommend investing in this project based on your financial analysis

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Based on the results of the financial analysis for this project we can see that NPV (an indicator of how much value an investment or project adds to the value of the company*1) = $41,740, ROI (the ratio of money gained or lost on an investment relative to the amount of money invested*2) = 25% and payback occurs in the third year. While both the NPV and ROI indicate that the project will have a positive financial impact, the fact that the payback will not occur until the third year means that the company will need to wait a long period of time before the benefits of the project are realised. Based upon the payback period I would recommend that other projects be sought unless this was one of major importance to the company for non-financial reasons ie; compliance with new legislation, etc.

*1 Net present value. In Wikipedia [Web]. Retrieved September 3, 2007, from http://en.wikipedia.org/wiki/Net_present_value
*2 Rate of return. In Wikipedia [Web]. Retrieved September 3, 2007, from http://en.wikipedia.org/wiki/Rate_of_return_on_investment

Chapter 4 – Exercise 2

Use spreadsheet software to create Figures 4-2 through 4-5 in this text. Make sure your formulas work correctly.

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Fig 4-2


Fig 4-3


Fig 4-4


Fig 4-5

In this exercise I found that in some cases my figures differed slightly from those published in the text (Figures 4-3 and 4-4 specifically). I believe this is due to rounding being used in those charts published, whereas no rounding was used in my own spreadsheets. The effects on the final outcome however were negligible.

Chapter 3 – Exercise 1

Study the WBS and Gantt charts provided in Figures 3-3 and 3-4. Enter the WBS into Project 2003, indenting tasks as shown to create the WBS hierarchy. Then enter durations and dependencies to try to reproduce the Gantt chart. Check your work with the files available on the companion Web site for this text.

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Whilst this task at surface level seems straight forward enough, I found it required a fairly detailed analysis of the information provided especially in the network diagram, to accurately replicate the Gantt chart. It was also a good exercise in ‘getting to know’ Project 2003.