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PRJM6001 Project Cost Management Assignment

Added on - 20 Nov 2019

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PRJM6001 PROJECT COST MANAGEMENTASSIGNMENT NO 2: LIFE CYCLE COSTINGName of UniversityStudent’s NameDated:Word Count:
PRJM6001 PROJECT COST MANAGEMENT ASSIGNMENT NO 2: LIFE CYCLE COSTINGTable of ContentsExecutive summary..................................................................................................................................3Introduction................................................................................................................................................3Assumptions..............................................................................................................................................3List of costs................................................................................................................................................4Sources for all items.................................................................................................................................5Treatment of car resale............................................................................................................................6Use of NPV process.................................................................................................................................7Discount rate.............................................................................................................................................7Conclusion.................................................................................................................................................8References................................................................................................................................................82|P a g e
PRJM6001 PROJECT COST MANAGEMENT ASSIGNMENT NO 2: LIFE CYCLE COSTINGExecutive summaryNPV (Net present value) is the amount which can be obtained by subtracting the incomes orbenefits from the product or project and the outflow for the project or product maintenance andits purchase cost. Product life cycle cost is the amount associated with the product for lifetime.When the NPV is distributed along the time line it can generate the data which can be used tocalculate the NPV over the period of product’s life cycle. In current case, the NPV has beendistributed to 5 years only for the sake of easiness in understanding the calculation.IntroductionLife cycle costing (LCC) is the cost associate with a project or product over the life of its use1.Net present value (NPV) is the estimation of some speculation over the timeframe. NPV givesdata with respect to the estimation of cash after some time, so it is also called ‘time value ofmoney’. In current case, we shall discuss the LCC & NPV for buying options (financing / owncash) available for a new car.In this report we shall understand the above discussed factors using the buying options of a newcar. The buying options which shall be evaluated are the ‘loan from a reputable car financinginstitution’ and the ‘Using own funds’ and shall see which option is more profitable or advisable.All the required assumptions as per the ground conditions and the latest available informationare used to calculate the same. The spreadsheet attached with the report shall show thecalculation in detailed.AssumptionsI selected the car Hyundai Elantra (1591 CC) for my family and own use at 81,9992SingaporeDollar (SGD) as base rate. The total value of the car shall be shown in the spreadsheet whereall other cost heads are calculated to derive at the total cost of car.1[ CITATION DOE17 \l 1033 ]2[ CITATION sgC17 \l 1033 ]3|P a g e
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