1. What are some sources of risk in a systems analysis and design project, and how does a project manager cope with risk during the stages of project management?

2. Suppose that you have been contracted by a jewelry store to manage a project to create a new inventory tracking system. Describe your initial approach to the project. What should your first activity be? What information would you need? To whom might you need to speak?

3. The economic analysis carried out during project identification and selection is rather superficial. Why is this? Consequently, what factors do you think tend to be most important for a potential project to survive this first phase of the life cycle?

4. Assuming monetary benefits of an information system at $85,000 per year, one-time costs of $75,000, recurring costs of $35,000 per year, a discount rate of 12 percent, and a five-year time horizon, calculate the net present value of these costs and benefits of an information system. Also calculate the overall return on investment of the project and then present a break-even analysis. At what point does breakeven occur?