BIT242 - IT Project Management

You work for a warehouse company that supplies fine art material to retailers. It employs 40 people, such as secretaires, accountants, sales people, and forklift drivers. Your boss has put you in charge of a new project – working with two other team members to select and then buy out one of the retailers for the purpose of entering the retail game.

1. Draw a stakeholder matrix and insert 4 of the most important stakeholders in your project into the matrix. You don't need to be concerned about positioning with the table cells.

2. A project team member said to you: "You know, the longer this project goes on the more important it is that we minimise communications with stakeholders." Provide one reason to agree with the team member and one reason to disagree, and state whether you mostly agree or disagree.

3. What are the 3 factors, commonly referred to as the "3 constraints", that you will pay most attention to in your attempt to complete the project successfully.

4. You expect the project to bring in returns of approximately $90,000 per year over the next 5 years. Buying the retailer and setting up the store is expected to cost $300,000. Inflation is running at 10%. With that in mind:

a. Assuming the $90,000 return all arrives at the end of each year, do a calculation that shows in today's terms (that is, in "real terms), the value of the project's returns over its life. Show all your workings.

b. Your boss doesn't like to look more than 5 years ahead and wants to know if this project is expected to return a profit in that time. Explain to your boss the reason why you would do an NPV and Payback Period calculation to reveal that profitability

c. You tell your boss that the NPV of this project is $ $41,171. Your boss has another option in mind that has an NPV value of $30,000 in the 4th year and $35,000 in the 5th – a bond investment. Which project would be the most profitable?