Chapter 7 - Project Cost Management.

Front 1

Direct Cost

Back 1

is directly attributable to the project and spent only on project work.

Example: Is the salaries of coders working on a software project.

Front 2

Indirect Cost

Back 2

is not directly attributable to the project, but often allocated to the project.

Example: Such a cost could be security for the building where the work of the project is performed.

Front 3

Fixed Cost

Back 3

consistent throughout the project lifecycle regardless of project activity. The leasing of office space for a software project is a fixed cost.

Front 4

Variable Cost

Back 4

is cost that fluctuates with project activity.

Front 5

ROI

Back 5

Return on Investment

Option to Elect: largest number or %

Front 6

IRR

Back 6

Internal Rate of Return

Option to elect: Largest Percentage

Front 7

NPR

Back 7

Net Present Value

Compares the value of a dollar today versus the value of that same dollar in the future, after taking inflation and discount rate into account.

Option to elect: Largest number ( years are already factored in)

Front 8

BCR

Back 8

Benefits Cost Ratio

Option: Largest Ratio

Example:

200,000 in revenue and 50,000 of cost have a BCR of 4:1.

Front 9

Opportunity Cost

Back 9

Is associated w/ taking another opportunity. It is what you give or leave on the table.

Front 10

Payback Period

Back 10

Is the amount of time needed to earn back the original investment.

Front 11

Sunk Cost

Back 11

Is a cost that has already been spent on a project. Do not consider sunk cost when making project decisions.

Example: if a project has a budget of 175,000 and has already spent 200,000, you would not consider the 200,000 when deciding whether to continue on the project or not.

Front 12

Depreciation

Back 12

is the process of devaluing a capital asset in the tax system. Capital assets are those that are purchased and depreciated over time.

Examples: office equipment, vehicles, and technology infrastructure.

Front 13

Actual Cost (AC)

Back 13

Sum of Actual Costs

Front 14

Earned Value (EV)

Back 14

% complete of project

Front 15

Present Value (PV)

Back 15

Value of Scheduled Work

Front 16

Budget at Completion (BAC)

Back 16

Total Budget

Front 17

Cost Performance Index (CPI)

Back 17

EV/AC

Front 18

Cost Variance (CV)

Back 18

EV-AC

Front 19

Schedule Performance Index (SPI)

Back 19

EV/PV

Front 20

Schedule Variance (SV)

Back 20

EV-PV

Front 21

Estimate at completion (EAC)

Back 21

BAC/CPI

Front 22

Estimate to Complete (ETC)

Back 22

EAC-AC

Front 23

Variance at Completion (VAC)

Back 23

BAC-EAC

Front 24

To-Complete Performance Index (TCPI)

Back 24

(BAC-EV)/(BAC-AC)

Front 25

Life Cycle Cost or Total Cost of Ownership

Back 25

Is the process of examining all costs associated with a project and its product once it goes into production.