Question: Determine a detailed budget from the given information below: Software & Database Development cost : $12,000 - $20,000 (this includes the software development, testing, and
Determine a detailed budget from the given information below:
Software & Database Development cost: $12,000 - $20,000 (this includes the software development, testing, and deployment costs)
Hardware and infrastructure costs: $7,000 - $9,000 (this includes the cost of servers, data storage, and other network components)
Training costs: $2,000 - $4,000 (mainly the training for customer service agents and some data analysts)
Maintenance and support costs: $3,000 - $5,000 (based on annual upkeep costs)
Project & other costs: $10,000 - $12,000 (Mainly project management, consulting, and some minor legal fees)
Total project budget: $34,000 - $50,000 5
Reduction in adjustment payouts: Based on the prediction of a reduced number of false claims, duplicate claims, and claims made in error, Rogers Telecommunications can expect to save $1,000 - $2,500 per month, or $12,000 - $30,000 per year.
Reduction in adjustments administration costs: Based on the prediction of increased productivity, scale, and other economic benefits, the cost of administering the program can be cut in half to $1,250 per month, or $15,000 per year.
See Exhibit A for the Net Present Value (NPV) & Return on Investment (ROI) The NPV of $21,166 in the first scenario and $130,606 in the second scenario are both positive, which indicates that the Adjustment Lobby is expected to generate more cash flows than the investment costs. The ROI is also both positive and quite high meaning the project will be a worthwhile investment.
Exhibit A: Net Present Value & Return on Investment
| Risk-Free Rate | 3.5% | |
| Minimum NPV/ROI | Maximum NPV/ROI | |
| Software & Database Development Costs | -$20,000 | -$12,000 |
| Hardware & Infrastructure Costs | -$9,000 | $7,000 |
| Training Costs | -$4,000 | -$2,000 |
| Maintenance & Support Costs | -$5,000 | -$3,000 |
| Project & Other Costs | -$12,000 | -$10,000 |
| Total Project Budget | -$50,000 | -$34,000 |
| Reduction in Adjustment Payout | $12,000 | $30,000 |
| Reduction in Adjustment Administration Costs | $15,000 | $15,000 |
| NPV | $21,166 | $130,606 |
| ROI | 21.71% | 192.07% |
Things the budget must include are:
- Budget Planning
- Budget Cost Summary
- Baseline Cost Report- histogram
- Cost breakdown
- Task/ Account Group/ Work Package/ Cost
- Cumulative Cost
- S-curve- Earliest start
- S-curve- Latest start
- Budget Breakdown- Time phase budget
- Contingency reserve
- Management reserve
| Task | Start date | End Date | Duration (days) | Dependencies |
| 1 | Jan 9, 2023 | Jan 11, 2023 | 2 | Start |
| 2 | Jan 9, 2023 | Feb 3, 2023 | 25 | 1SS |
| 3 | Feb 4, 2023 | Feb 21, 2023 | 17 | 2FS |
| 4 | Feb 22, 2023 | Mar 14, 2023 | 20 | 3FS |
| 5 | Mar 15, 2023 | Mar 20, 2023 | 5 | 3FS |
| 6 | Mar 21, 2023 | Apr 1, 2023 | 11 | 5FS |
| 7 | Jan 9, 2023 | Feb 23, 2023 | 45 | 2SS |
| 8 | Feb 24, 2023 | Mar 16, 2023 | 20 | 7FS |
| 9 | Mar17, 2023 | Mar 22, 2023 | 5 | 8FS |
| 10 | Mar 23, 2023 | Apr 1, 2023 | 9 | 9FS |
| 11 | Mar 17, 2023 | Mar 31, 2023 | 14 | 9SS |
| 12 | Apr 1, 2023 | Apr 8, 2023 | 7 | 10FS |
| 13 | Apr 9, 2023 | Apr 30, 2023 | 21 | 12FS |
| 14 | Apr 30, 2023 | Jun 9, 2023 | 40 | 13FS |
| 15 | Jun 10, 2023 | Jun 24, 2023 | 14 | 14FS |
| 16 | Jun 25, 2023 | Jul 10, 2023 | 15 | 15FS |
| 17 | Jul 11, 2023 | Jul 21, 2023 | 10 | 16FS |
| 18 | Jul 22, 2023 | Aug 11, 2023 | 20 | 17FS |
| 19 | Aug 12, 2023 | Oct 9, 2023 | 60 | 18FS |
| 20 | Oct 10, 2023 | Oct 20, 2023 | 10 | 19FS |
| 21 | Oct 21, 2023 | Oct 23, 2023 | 2 | 20FS |
| 22 | Oct 10, 2023 | Nov 1, 2023 | 22 | 20SS |
| 23 | Nov 1, 2023 | Nov 22, 2023 | 21 | 22FS |
| 24 | Nov 23, 2023 | Nov 24, 2023 | 1 | 23FS |
| 25 | Nov 25, 2023 | Dec 22, 2023 | 27 | 24FS |
| 26 | Nov 25, 2023 | Dec 27, 2023 | 32 | 25SS |
| 27 | Dec 28, 2023 | Dec 27, 2023 | 1 | 25FS |
| 28 | Dec 28, 2023 | Jan 4, 2024 | 7 | 27FS |
| 29 | Jan 5, 2024 | Jan 9, 2024 | 4 | 28FS |
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