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Finance Assignment: Financial Project

   

Added on  2020-06-06

12 Pages1783 Words75 Views
FINANCIAL PROJECT

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Main body........................................................................................................................................1CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8Table 1Project evaluation in case of pessimisic scenerio for first alternative.................................4Table 2Project evaluation in case of base scenerio for first alternative...........................................4Table 3Project evaluation in case of optimistic scenerio for first alternative..................................5Table 4Project evaluation in case of optiimisic scenerio for second alternative.............................5Table 5Project evaluation in case of base scenerio for second alternative......................................6Table 6Project evaluation in case of pesimisic scenerio for second alternative..............................6

INTRODUCTIONProjects are the one of the important factor that determine growth of any business firm.There are number of factors that need to be taken in to account while preparing project relateddetails and evaluating same. Current research report is based on case study of Tech train that isgivng corporate training to the individuals that are employed in specific company. There are twoalternatives in front of firm either it can make use of services of its subsidiary company or canmake use of online education platform that is provided by other company. Proposal related toboth firms are discussed in detail in the report and in this regard project evaluation techniquesare applied on cash flows and it is identified that which of option will be better. Apart from this,for each option different scenerios are given and in each scenerio project evaluation is done.Hence, it can be said that scope of present research study is wide and lots of things are covered inthe report.Main bodyProject evaluation method is applied on two alternatives and under different scenerios. Asmentioned in introduction section of the report Tech train have two options either it can makeuse of services of its subsidiary company or it can take service of other form under which firmgive training through online mode only. It is important to understand both projects deeply so thatright one option can be selected by the business firm. It can be seen that in case firm make use ofservices of its subsidiary company Hiimpact then cost will be 3.3 million which is huge. Mainreason behind such high cost is that mode of class will be offline and there are highly talentedtrainers that have deep understanding on research topic and same for other company that providetraining through online platform is 0.5 million (Posavac, 2015). Comparison of both facts reflectthat project one seem costly for the firm then second alternative. There is also huge difference inoperating cost of both projects as same for first alternative under which usage of services ofsubsidiary company is required is 2126160 and same for other alternative is 288000. Apart fromthis, difference in both projects in terms of total investment amount is 7257960 and same forsecond alternative is 528000. Three situations are projected which are good, neutral and bad andit is identified that ccash flows in all these cases heavily vary from each other. It is veryimportant to identify that if worst happened that currently management does not expect what canbe happened. By doing so mangement can prepare itself to handle any situation and can decideeasily whether to select any project or not. As per case study if Byod will leave its team that is1 | P a g e

operating in firm subsidiary then it will not be able to perform well. Hence, it is very importantto make projection of cash flows and identifying trends. In order to make comparison easy it isassumed that same cash flows will be observed from second project also.1234567823.4629.3335.1940.4742.4943.3444.2145.1PessimesticFigure 1Pessimistic cash flows trends12345678010203040506024.2131.2338.4247.2550.5652.0853.6455.25BaseFigure 2Base cash flows estimation2 | P a g e

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