Question and Answer Assignment
- The largest development expenses will be purchase of development hardware infrastructure. This is due to the large number of development hardware that is needed to support various sectors of the pride software system.
- The most difficult development costs would be the software development costs. This is because of the large and uncertain parameters needed, such as security applications for customers and employees.
- The security software development costs have not been included in the cost analysis.
- The largest operational expenses are expected to be cloud hardware, contractor fees, and staff salaries.
- The most difficult operational expenses to estimate would be the maintenance costs.
- The operational expenses that have not been included include changes to the software to add newer features, such as medical practice payment, insurance policies, and government regulations.
- The operational costs that depend on usage by doctors are such as cloud storage costs, backup and recovery expenses, salaries, and education and training costs. Those operational expenses that do not depend on usage and frequency by doctors are such as contractor fees, software maintenance expenses, maintenance developer hardware, and customer support expenses.
- The operational costs that depend on the number of patients and their frequency of use are such as software maintenance expenses, cloud storage costs, backup and recovery expenses, maintenance developer hardware, and customer support expenses. Those operational expenses that do not affect customer usage and numbers are such as salaries, education and training costs, and contractor fees.
- The operational costs that depend on the number of health club members and their frequency of use are such as software maintenance expenses, cloud storage costs, backup and recovery expenses, maintenance developer hardware, and education and training of staff and health club members. Those operational expenses that do not affect health club members usage are such as contractor fees
- The two choices would be software development costs and contractor fees. The latter would be essential to assess its costs during the development stage, as well as during the operational stage that is related to maintenance of the system, and addition of other parameters and features to the software. The software development costs would need to be assessed to cater to parameters that have e not been considered such as security applications.
- The criteria used would be the need to better understand the cost structures for the project. This means dividing the costs between the known, and the unknown.
I would advise the investor that analyzing the capital for starting a business is an intricate process with may hidden unknown costs and revenue outcomes from the business. Therefore, it would be vital that the investor have some extra cash to cater to shortfalls in the capital investment to offset any extra expenses.
The response would be similar to question 10-10 above.
Yes. The unknowable factors were considered in the answer to question 10-9. However, I believe that I would not be wasting Maggie and Dr. Flores’ time and money since the former is capable of making estimates of possible costs associated with the unknown costs. Therefore, I would advise the investor to consider this venture as a high-risk investment, but whose yield could be immense.