A project is currently scheduled to be finished on its normal earliest completion date. The project manager has the opportunity to earn a bonus if the project can be completed three weeks ahead of schedule. The increase in project direct costs related to crashing activities would be $40,000. Also, project indirect costs are $15,000 per week. What is the smallest bonus that the project manager should accept if he or she wants to avoid increasing overall project costs?
A) less than or equal to $5,000
B) greater than $5,000 but less than or equal to $10,000
C) greater than $10,000 but less than or equal to $15,000
D) greater than $15,000

Question

Quizplus · Accepted Answer

The smallest bonus that the project manager should accept is $5,000. This is because the increase in project direct costs is $40,000 and the project indirect costs are $15,000 per week. So, the total increase in project costs is $40,000 + (3 * $15,000) = $70,000. Therefore, the project manager should accept a bonus of less than or equal to $5,000 to avoid increasing overall project costs.

A Project Is Currently Scheduled to Be Finished on Its