Need some help answering the below question.
Assume that an alternative has a 3-year life and that you calculated its annual worth over its 3-year lifecycle. If you were told to provide the annual worth of that alternative for a 4-year study period, would the annual worth value you calculated from the alternative's 3-year life cycle be a valid estimate of the annual worth over the 4-year study period? Why or why not?© BrainMass Inc. brainmass.com October 17, 2018, 12:05 am ad1c9bdddf
No it will not be a valid estimate. When we are talking about the annual worth of an alternative, we are talking about the equivalent annual cost/benefit. This is done to compare the projects which have unequal life. So if there is a project / alternative with a life of 3 years, the cash flows form the projects may have any pattern i.e. equal every year, increasing as time goes up, decreasing as time moves down or just random. In this case, it is very difficult for us to know what will be ...
The life of the project is dissected.
Applying the Project Life Cycle Simulation
Run the "Applying the Project Life Cycle" simulation found on your rEsourceSM course page. Then write a paper that includes the following:
1. A communications plan, addressing how progress will be reported to the various project sponsors and executives
2. A forecast of the time required to complete the project
3. The project closure process that will be employed
4. A brief explanation of the project audit process and how it will be applied to your project
5. Budget estimates for the project
6. Forecasted project outcomes, using quantifiable measures of success for the project and verifying project alignment with your organization's goals
7. Three key learning points from the "Applying the Project Life Cycle" simulation that you applied as you worked on your Project Plan