Financing of Projects: Exploring the Value and Techniques

This document explores the financing value of projects, including modeling and forecasting of financial markets, development of instruments and securities, financial risk management, asset allocation, and asset management.

(Insert Student Name) / (Insert Student Number) - PPMP20013Unit Portfolio for Week 3
Week 3: Explore and explain the financing of projects.
Reading samples Learning
outcomes of the
unit
Learnings from your weekly study, experience, this and
prior unit readings and assignments
Supporting
documentation
including any
prior learning
Mandatory Readings
 Smith Chapters 6;
 Chapter 26 from
Edwards J. D.,
Hermanson R. H.,
Ivancevich S D.
(2010) Accounting
Principles Vol 2:
Managerial
Accounting;
1. Financing of the
project
Key parameters of the
financing projects
The objective of this week’s topic is to explore the financing value of the project.
 Modelling as well as forecasting of the financial markets
 Development of instruments plus securities
 Financial risk management
 Asset of the allocation plus investment management
 Asset management
The lenders will use parameters as follows:
 Total size of the project work
 Break even dates of the project
 Milestones of the project
 Summary of the financial project loan
Lecture slide of Week 3
Mandatory Readings
 Smith Chapters 6;
 Chapter 26 from
Edwards J. D.,
Hermanson R. H.,
Ivancevich S D.
(2010) Accounting
Principles Vol 2:
Managerial
Accounting;
2. Financing tools and
techniques
Common size statements:
It is the statement in which the figures are reported and converted into
percentage of the common bases. It is balance sheet along with income
statement which is prepared for the vertical analysis to identify the changes
which are taken over a time period.
Trend ratios:
It is the index numbers of movements of the financial figures which are being
reported into the financial statement for the accounting period. It is a technique
to adopt and reveal the trend of the financial items used for the financial items.
Lecture slide of Week 3
And Books
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(Insert Student Name) / (Insert Student Number) - PPMP20013Unit Portfolio for Week 3
Reading samples Learning
outcomes of the
unit
Learnings from your weekly study, experience, this and
prior unit readings and assignments
Supporting
documentation
including any
prior learning
Optional Readings
 Chapter 18 from
Edwards J. D.,
Hermanson R. H.,
Ivancevich S D.
(2010) compares
managerial
accounting with
financial
accounting;
Case Study
 Brisbane Airport
New Parallel
Runway Funding
Facts;
Fund flow analysis:
It provides details of the changes into the financial terms concern among the
balance sheet dates. It is focused on net working capital concepts stated as
fund. This flow statement consists of details regarding financial resources
throughout accounting period.
Cash flow statement:
This statement can report the cash receipts, cash payments along with net
changes into cash resulting from operating and financing activities throughout
accounting period.
Optional Readings
 Chapter 18 from
Edwards J. D.,
Hermanson R. H.,
Ivancevich S D.
(2010) compares
managerial
accounting with
financial
accounting;
Case Study
 Brisbane Airport
New Parallel
Runway Funding
Facts;
3. Factors affect cash
flow curve of the
project
Following are the factors which the cash flow of Brisbane Airport New Parallel
Runway are as follows:
 Total time require to set the objectives of the project
 Time required to get statutory approvals
 Time required to finalize the design of the runway for Brisbane
 Time required to approve the contracts and financial arrangements
 Rate plus amount of total cost required for the construction of Airport
New Parallel Runway
Lecture slide of Week 3
2 of 5

(Insert Student Name) / (Insert Student Number) - PPMP20013Unit Portfolio for Week 3
Reading samples Learning
outcomes of the
unit
Learnings from your weekly study, experience, this and
prior unit readings and assignments
Supporting
documentation
including any
prior learning
Mandatory Readings
 Smith Chapters 6;
 Chapter 26 from
Edwards J. D.,
Hermanson R. H.,
Ivancevich S D.
(2010) Accounting
Principles Vol 2:
Managerial
Accounting;
Optional Readings
 Chapter 18 from
Edwards J. D.,
Hermanson R. H.,
Ivancevich S D.
(2010) compares
managerial
accounting with
financial
accounting;
Case Study
 Brisbane Airport
New Parallel
Runway Funding
Facts;
4. Analyse the
allocation of risks by the
project lenders
Following are the project risks which are identified while construction work of
Brisbane Airport New Parallel Runway is carried out such as:
 Inflation and foreign exchange risks: The inflation is related to the
interest rates that can provide an influence on the exchange rate. Low
interest rate of the project is not attracted the foreign investments.
Higher rate of interest tends to attract the foreign investment which
can increase demand for the Brisbane’s currency.
 Performance and operating risks: This risk has occurred when the
project completion work is failed to perform as intended and failed to
meet with the business needs.
 Insurable risks: The project is not conformed to norms plus
specifications of the insurance policies that the criterion for the
insurance is being fulfilled.
Lecture slide of Week 3
Mandatory Readings
 Smith Chapters 6;
 Chapter 26 from
Edwards J. D.,
Hermanson R. H.,
5. Demonstrate an
effective, professional
level of teamwork and
communication and
The students should collaborate with each others to analyse the total financing
of the project. This group project helps students for developing of skills and
knowledge to do budgeting of the project. The teamwork financing project
increases the client satisfaction to make easier for the project client for making Lecture slide of Week 3
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(Insert Student Name) / (Insert Student Number) - PPMP20013Unit Portfolio for Week 3
Reading samples Learning
outcomes of the
unit
Learnings from your weekly study, experience, this and
prior unit readings and assignments
Supporting
documentation
including any
prior learning
Ivancevich S D.
(2010) Accounting
Principles Vol 2:
Managerial
Accounting;
Optional Readings
 Chapter 18 from
Edwards J. D.,
Hermanson R. H.,
Ivancevich S D.
(2010) compares
managerial
accounting with
financial
accounting;
Case Study
 Brisbane Airport
New Parallel
Runway Funding
Facts;
support collaborative
peer group learning.
project progress.
The team collaboration is a collaborative effort for the project team to achieve
the common goals for completion of project tasks. It helps to ensure that the
students should read the lecture slides for getting ideas related to the course.
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(Insert Student Name) / (Insert Student Number) - PPMP20013Unit Portfolio for Week 3
References
Bodiako, A. V., Ponomareva, S. V., Rogulenko, T. M., Karp, M., Kirova, E., Gorlov, V., & Burdina, A. (2016). The goal setting of internal control in the system of
project financing. International journal of economics and financial issues, 6(4), 1945-1955.
Chirkunova, E. K., Kireeva, E. E., Kornilova, A. D., & Pschenichnikova, J. S. (2016). Research of instruments for financing of innovation and investment
construction projects. Procedia Engineering, 153, 112-117.
Lohmann, G., & Trischler, J. (2017). Licence to build, licence to charge? Market power, pricing and the financing of airport infrastructure development in
Australia. Transport Policy, 59, 28-37.
Tangri, K. (2018). Planning and delivering Brisbane Airport’s new runway. Journal of Airport Management, 12(2), 169-185.
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