In: Accounting
| Activity | Duration | Predecessor | Cost | 
| A | 8 | - | 25000 | 
| B | 12 | - | 42000 | 
| C | 7 | A | 18000 | 
| D | 10 | A | 27000 | 
| E | 14 | B,C | 46000 | 
| F | 5 | B,C | 12000 | 
| G | 3 | D,E | 7000 | 
| H | 12 | D,E | 42000 | 
| I | 10 | F,G | 36000 | 
Consider the following project data. Assume costs are incurred upon completion of an activity. At the end of the project a lump sum payment of 340,000 is to be made.
a) Find the net present value of the project at a discount rate of 3% per period.
| Activity | Crashed Duration | Normal Duration | Crashed Cost | Normal Cost | 
| C | 5 | 7 | 22000 | 18000 | 
| E | 11 | 14 | 58000 | 46000 | 
| I | 8 | 10 | 44000 | 36000 | 
b)Given an option is available to reduce the duration of following activities at additional cost, what would be the optimal project duration? Assume indirect costs to be negligible.