Project and Change Management Assignment Example | Topics and Well Written Essays - 1000 words

Project and Change Management - Assignment Example Break Even Point Indeed, in talking about break even point, reference is being made to that time in the investment process when a balance can be reached in either making a profit or a los (Chen, and Chung, 2009). Subsequently, gain must equal loss at this point so that the marginal level of profit can be 0 on a normative scale. Noting that in our present scenario the capital injection will not be added into finding the break even point, it is important to mention however that the opportunity cost of the capital shall be accounted for. This way, the break even point can be said to be that time in the investment when gains from reduced cost of labor and increases in gross revenue per year is equated to the sum of all the expenditure cost. Should the project be accepted for financing? Generally, a project is worth accepting for financing if the cost of the capital injection is relatively less than the internal rate of return. In other words, the internal rate of return ought to be great er than the capital for the investment to be accepted as viable. To this end, as the quoted net present value on the investment has been found to be 572968 whiles the initial capital is 450,050, it can be said that the project should be accepted for financing. Question 2: Earned Value Management – Project monitoring and controlling 1. Based on the 0-100% rule, please calculate the following: a. CPI and SPI and explain what the values mean. [4 pts] The CPI strikes a ratio between the expected value and the actual value. In this present situation, the expected values are represented by the planned cost. Subsequently, CPI = ?Planned Cost/?Actual Cost = 3600/3400 = 1.06 Value for SPI is calculated based on the period for which activities that been completed according to the 100%. In this direction, SPI = Expected Value / Present Value = 600+1200+400+400)/(600+1200+400+400) = 2600/2600 = 1 b. Estimated cost at completion for the deck project