Discounted cash flow is an project investment valuation method whereby future cash flows are discounted by a rate that accounts for the time value of money. It is used to make decisions between various available projects, or to determine the economic feasibility of a project. For example, when a business is expecting revenue of $250,000 next year, the current … [Read more...]
Payback period is the length of time required for an investment to recover its capital. It is the amount of time required until the investment is in a break even position. It is generally used for investments that involve a large up front capital outlay, such as the construction of an industrial facility, or development of a software product. The shorter the … [Read more...]
Top Down estimating is a project estimating technique whereby the overall project is estimated first, and individual tasks are apportioned from it. You start from the top of the pyramid and work downwards. This type of project budgeting usually occurs when there is a fixed budget and/or the scope of the project must fit within a predetermined funding level, … [Read more...]
Keeping project costs under control can feel like swimming against the current sometimes. To prevent you from going up the creek without a paddle, a Cost Management Plan is the guiding document which allows you to take fast, decisive action when issues arise and the sharks are circling. The Project Cost Management Plan is the component of the overall Project … [Read more...]
Mismanaging project costs is the single fastest way to cause project failure. The project costs represent the many multi-faceted experiences that occur on a project, however stakeholders see only the bottom line and draw rapid conclusions from it. For this reason, the planning of the management of project costs is the focus of the Project Management Body of … [Read more...]
Estimating task durations is one of the fundamental parts of project management. It involves the estimation of the amount of time required by a certain project activity given the available resources. This happen directly after cost estimating. In the Project Management Body of Knowledge (PMBOK), the main output of the Estimate Activity Duration process are Activity … [Read more...]
