Reference no: EM13347000
An analysis of the overall project risk resulted in classifying Project A as a "risky project" because it scores 8 in a risk scale of 10 (in the scale 1 = very low risk).
Subject matter experts were asked the question: Do you think Project A has the capability to attract more projects from the current customer and from new customers? 8 out of 10 agreed it has attraction capability.
Project A's life cycle is expected to be 2 years. During these 2 years project A is expected to cost:
![821_Analysis of the overall project risk.png](https://www.mywordsolution.com/CMSImages/821_Analysis%20of%20the%20overall%20project%20risk.png)
The market life cycle of the project A's deliverable is 5 years (i.e., a product/system life cycle of 7 years). Project A is expected to start to generate revenues at the beginning of year 3. The expected revenues of project A are:
![141_Analysis of the overall project risk1.png](https://www.mywordsolution.com/CMSImages/141_Analysis%20of%20the%20overall%20project%20risk1.png)
Annual costs during the market life cycle are expected to be:
![1570_Analysis of the overall project risk2.png](https://www.mywordsolution.com/CMSImages/1570_Analysis%20of%20the%20overall%20project%20risk2.png)
PROJECT B:
An analysis of the overall project risk resulted in classifying Project B as a "very low risk project" because it scores 1 in a risk scale of 10 (in the scale 1 = very low risk). Subject matter experts were asked the question: Do you think Project B has the capability to attract more projects from the current customer and from new customers? 2 out of 10 agreed it has attraction capability.
Project B's life cycle is expected to be 7 years. During these years Project B is expected to cost:
![539_Analysis of the overall project risk3.png](https://www.mywordsolution.com/CMSImages/539_Analysis%20of%20the%20overall%20project%20risk3.png)
The market life cycle of the Project B is 30 year (i.e., a product/system life cycle of 37 years). Project B is expected to start to generate revenues at the beginning of year 2. The expected revenues of Project B are:
Annual costs during the market life cycle are expected to be:
![683_Analysis of the overall project risk4.png](https://www.mywordsolution.com/CMSImages/683_Analysis%20of%20the%20overall%20project%20risk4.png)