I do not want the answers; I want to know how to calculate the answers. Explanations and examples on how to do this is what I am looking for.

Question

Part 1: Initial Plan Budget
You are a manager with budget authority for a new IT project that is being developed for your
department. The project is being developed internally by the company IT staff. You are developing a
budget for the project. In this scenario, you will be in integrating information systems and information
technology to progress an organization toward their organizational objectives. Consider the
information given to determine how much capital you will need to raise to complete this project
successfully. Your goal is determining the budget needed to complete the project within the stated
timeline and maintain the system through the full 5-year maintenance contract. Note that the first
month of maintenance for the contract starts simultaneously with the start of the project. In this case,
you have wisely decided to add a 10% strategic reserve to the development phase of the project.
There are some calculations related to this project. Answer the following 10 questions. You can use
Microsoft® Excel® to do this work, and/or provide your answers in Microsoft® Word®
; however, you
must show your answers and detailed calculations. Your work must be free of grammatical errors.
Given:
● IT Project Timeline: 1 January 2019–31 March 2020
● 3 weeks of holiday time is planned off during this timeline
● Do not forget the concept of a leap year if it is appropriate
● Assume vacation weeks are not paid for the purpose of this problem, as vacation pay is paid and
allocated by a separate corporate budget funding source different from the IT Project funding
source
● If total weeks are computed as a non-whole number of weeks, round to the nearest week
● Carry out items to the thousands place for fractions (for example 1/3 = 0.333) prior to continuing
calculations, then round up or down as needed to whole numbers for final dollar values
● 40-hour work week is the standard contracted work week
● No overtime is allowed to keep costs down
● 10 managers
● 100 programmers and staff
● Manager salary is $50 per hour
● Programmers and staff salary is $35 per hour
● Systems planning cost is $100K
● System development cost is $1.3M
● System fielding cost is $300K
● System maintenance (5-year contract, amortized, payments begin at project start and are paid
monthly) = $5.0M
● Strategic reserve, when (if) applied to the timeline, should also be applied to the maintenance
costs during the timeframe of the timeline. However, maintenance costs beyond the timeline
have been negotiated as a firm fixed price contract and do not require the use of strategic
reserve in addition to the negotiated price.
Unit 6 [MT300]
Page 2 of 2
Answer the following questions and show your work:
1. How many work weeks are in the project timeline, where work will actually occur?
2. How much money does the team cost per hour?
3. How much money does the team cost per week?
4. How much money does the team cost for the duration of the IT project?
5. Remembering that maintenance is amortized, that payments begin during the first month
of the project, and that all other system costs are assigned to the project, what is the total
systems cost through the timeline completion on 31 March 2020?
6. What is the total project cost through completion on 31 March 2020?
7. After project completion on 31 March 2020, what will be the remainder cost for
maintenance that will still need to be budgeted and managed?
8. Forecasting a budget with no strategic reserve, what should the project cost per month
be for the budget during the project timeline?
9. With the addition of a 10% strategic reserve, what should the project cost per month be
for the budget during the project timeline?
10. Considering that you decide to budget using the strategic reserve, and you need to
budget for the entire maintenance cost, what is the total amount of capital you will need to
raise to complete the project successfully during the timeline and then maintain the
system through the full 5-year maintenance contract, noting that the first month of
maintenance for the contract starts simultaneously with the start of the project?