Development hours required

Cost ($52 per hour)

Revenue
First Year
Second Year
Third Year
NPV
Ranks (NPV basis)

Current headcount of developers

Annual work hours per employee
Total man hours available

Option 1
1250
-65000

Option 2
400
-20800

750000
675000
607500
$ 1,575,155.23 $
4

250000
262500
275625
607,862.11
6

4
2500
10000

A possible set of projects that can be taken up

Option
Option
Option
Option

5
6
1
2

Rank
1
2
4
6

Workforce utilization

Option 3
750
-39000

Option 4
2500
-130000

Option 5
1875
-97500

Option 6
6250
-325000

500000
1000000
2500000
1300000
525000
1100000
2875000
1365000
551250
1210000
3306250
1433250
$ 1,218,324.22 $ 2,501,024.51 $ 6,779,898.70 $ 2,944,042.97
5
3
1
2

No of hrs reqd.
1875
6250
1250
400
9775
98%

Options
1
2
3
4
5
6

Remarks
Integration of calender and e-mail
Expense report
Portfolio tracking system
Spreadsheet Program
Web Browser
Trip Planner

Obtaining leadership position

Use of internet
NPV
Ranks (NPV basis)

Option 1 Option 2 Option 3 Option 4

Moderate
High
High
Moderate
Moderate
Low
Moderate
No
1575155.2 607862.1 1218324.2 2501024.5
4
6
5
3

Criteria
Weight
NPV
50%
Leadership position
25%
Internet use
25%
Weighted average score
Rank

Option 1 Option 2 Option 3

0.232327 0.0896565 0.1796965
0.67
1
1
0.67
0.33
0.67
0.451164 0.3773283 0.5073483
4
5
3

Option 5 Option 6
Low
Low
High
High
6779899 2944043
1
2

Option 4 Option 5 Option 6

0.368888
1 0.434231
0.67
0.33
0.33
0
1
1
0.351944
0.8325 0.549616
6
1
2

Scores on basis of importance

Importance Score out of 100
High
1
Moderate
0.67
Low
0.33
No
0

Possibility 1

Possibility 2

Projects taken with 4 employees

Rank No of hrs reqd. NPV
Option 5
1
1875
6,779,898.70
Option 6
2
6250
2,944,042.97
Option 1
4
1250
1,575,155.23
Option 2
6
400
607,862.11
Total
9775
###
Workforce utilization
98%

Option 5
Option 4
Option 1
Option 3
Option 2
Total
Workforce Utilization

Rank
1
3
4
5
6

No of hrs reqd. NPV

1875
6,779,898.70
2500
2,501,024.51
1250
1,575,155.23
750
1,218,324.22
400
607,862.11
6775
###
68%

By seeing NPV possibility 2 is better

Development hours required

NPV
Ranks (NPV basis)

Option 1
1250
1,575,155.23
4

If additonal man power is hired

New Manhours
12500
Additional cost incurred
130000

Option 2
Option 3
400
750
607,862.11 1,218,324.22
6
5

Projects

Option 5
Option 6
Option 4
Option 1
Option 2
Total
Improvement in NPV by
Additional Co
Net Be

As net benefits by hiring an employee are positive, hence the organizat

to realize additional gains

Option 4
2500
2,501,024.51
3

Option 5
1875
6,779,898.70
1

Option 6
6250
2,944,042.97
2

Projects taken with 5 employees

Rank
No of hrs reqd. NPV
1
1875
6,779,898.70
2
6250
2,944,042.97
3
2500
2,501,024.51
4
1250
1,575,155.23
6
400
607,862.11
14,407,983.51
provement in NPV by hiring one employee
1,725,718.75
Additional Cost incurred
130,000.00
Net Benefits
1,595,718.75

hence the organization should hire one more employee