You are a project manager at a mid$-$sized technology company, Tech Solutions Inc. Your

company is planning to launch a new software product that aims to streamline project

management processes for small to medium enterprises $($SMEs$).$ The executive board has

provided you with initial data and tasked you with analyzing the project viability, estimating

costs, and preparing a detailed budget. Additionally, you need to report on the project$$s status

after the first three months using EVM techniques.

Provided Data:

$1.$ Funding Sources:

o Internal Funds: $$500,000$

o Bank Loan: $$3,000,000$ at an annual interest rate of $5\%$

$2.$ Top$-$Down Budget:

o Total estimated budget: $$3,200,000$

$3.$ Forecasted Benefit Realization:

o Year $1$: $$500,000$

o Year $2$: $$1,200,000$

o Year $3$: $$2,000,000$

o Year $4$: $$2,500,000$

o Year $5$: $$3,000,000$

$4.$ Discount Rate: $8\%$

$5.$ Project Phases and Estimated Costs:

o Phase $1$: Planning $-$ $$200,000$

o Phase $2$: Development $-$ $$1,500,000$

o Phase $3$: Testing $-$ $$500,000$

o Phase $4$: Marketing $-$ $$700,000$

o Phase $5$: Deployment $-$ $$300,000$

$6.$ Contingencies:

o $10\%$ contingency for Development

o $5\%$ contingency for Testing

o $15\%$ contingency for Marketing

Tasks:

$1.$ Project Selection Using Discounted Cash Flow $($DCF$)$ and Sensitivity Analysis:

o Calculate the Net Present Value $($NPV$)$ of the project using the provided discount

rate.

o Perform a sensitivity analysis on the discount rate $(\backslash$pm $2\%).$

o Provide a rationale for whether the project should be selected based on the NPV

and sensitivity analysis results.

$2.$ Cost Estimations and Bottom$-$Up Budget:

o Estimate the total cost for each project phase considering the provided

contingencies.

o Build a detailed bottom$-$up budget that includes:

$$ Labor costs

$$ Material costs

$$ Overheads

o Compare the bottom$-$up budget with the top$-$down budget and discuss any

discrepancies.

$3.$ Status Report Using EVM Techniques:

o Assume the project is three months into execution, and the following data is

available:

$$ Planned Value $($PV$)$: $$750,000$

$$ Earned Value $($EV$)$: $$600,000$

$$ Actual Cost $($AC$)$: $$800,000$

o Calculate the following EVM metrics:

$$ Schedule Variance $($SV$)$

$$ Cost Variance $($CV$)$

$$ Schedule Performance Index $($SPI$)$

$$ Cost Performance Index $($CPI$)$

o Based on the EVM metrics, provide a status report discussing the project$$s current

status, potential risks, and recommended corrective actions.