CIS 635Spring 2013 Homework # 5 Business Case AnalysisPrecision Products Inc.(PP

CIS 635Spring 2013
Homework # 5 Business Case AnalysisPrecision Products Inc.(PPI) has a software staff of 205 people supporting its product line of industrial electronic devices. It has been exploring the use of the software Capability Maturity Model to improve its software performance. An initial assessment has indicated that the company has just reached a nominal level (CMM level 2) on the COCOMO II rating scale for Process Maturity(PMAT). Some other characteristics of its average project are:PPI is considering a process maturity investment effort to bring its CMM Level up to 3 and benefit from the project effort reduction estimation by COCOMO II via the reduction in the scale exponent E for its projects. The process maturity investment will require two years at an annual expenditure of :Assuming that all PPI software projects and people have the average characteristics above and assuming that all 200 of the project staff are always fully employed on projects perform a simple business case analysis (excluding present value effects) for the process maturity investment including:If future costs and savings were discounted at a rate of i=0.95 per year would the following increase or decrease:a. Length of time to the breakeven point?b. Size of the ROI?