The project has started to catch up after a lot of hard work. You now have a bit of time to proactively plan forward for the project. You suspect the previous project manager did not do his job properly. The project has run into costing issues and stakeholders are unhappy about it.

a) Explain 4 problems you may encounter when project managers perform IT Cost estimation. (4 marks)

b) System A had an initial start-up cost of $10,000 and an annual recurring cost of $15,000. System B had an initial startup cost of $35,000 and an annual recurrent cost of $10,000. Which system would you have recommended and why? Assume the project has a lifespan of 8 years (year 1 to year 8) and the recurrent cost starts from year 2. (3 marks)