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Sample Assignment on Project Management (DOC)

   

Added on  2021-06-16

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PROJECT MANAGEMENTTABLE OF CONTENT

SPART A......................................................................................................................................3Executive summary................................................................................................................3Question 1...............................................................................................................................3Question 2...............................................................................................................................4Question 3...............................................................................................................................5Question 4...............................................................................................................................6Recommendations..................................................................................................................7Part B..........................................................................................................................................7a).............................................................................................................................................7b).............................................................................................................................................8i)..............................................................................................................................................8ii).............................................................................................................................................8iii)...........................................................................................................................................9iv)............................................................................................................................................9REFERENCES.........................................................................................................................10

PART AExecutive summaryCapital budgeting is referred as a procedure for evaluating additions to fixed assets. It issignificant because decisions related to fixed asset investment graphs the future course of thecompany. This project is said to be identical, to the decision-making process employed byindividuals engaged in making investment decisions. In this project, finance managers arerequired to consider role of cost management, environmental aspects and source of finance. Question 1Selection or rejection of new project is based on capital budgeting tools. Further, the stepsengaged in this process are; estimation of cash flows wherein the maturity value, interest ordividends in a situation of stocks and bonds are considered, whereas the operating cash flow in asituation of cash flows (Kerzner and Kerzner, 2017). Another step is assessing the risk factor ofcash flow; the next step is the determination of the suitable discount rate on the basis of cashflows and standard level of rate of interest. Another step is the evaluation of cash flows.Net present value is the best suitable tool of capital-budgeting; it has stability with the aim ofmaximizing the wealth of shareholder. This methodology makes a comparison of the presentvalue of potential benefits as well as cash flows from the project to the present value of thepotential costs. In a situation where the benefits are higher, then it will result in the selection ofthe project (Kerzner, 2018). Further, implementation of IRR can be done; this makes acomparison of the capital cost of the firm to the RRR creating the net cash flows from the projectequivalent to the cost of the project.Moreover, a project is agreed when the IRR is higher as compared to the capital cost of the firm.Other tools are payback period and profitability index, but these are less effective in comparisonto other two methods (Harrison and Lock, 2017). Better rankings are provided by NPV or IRRon the basis of the assumption of optimal reinvestment rate, whichever is higher. Usually, theassumption of NPV is comparatively better. Firms have limited capital amount in order to makea commitment towards the project. In case the firm has raised capital externally to finance certainpositive variables of NPV projects, then the firm will experience increased capital cost. Oneother impact of the large budgeting of capital is that firm might go for ration capital that is notfinancing all the projects. Firms have limited capital amount in order to make a commitment3

towards the project. In case the firm has raised capital externally to finance certain positivevariables of NPV projects, then the firm will experience increased capital cost. One other impactof the large budgeting of capital is that firm might go for ration capital that is not financing allthe projects. Question 2The cost management plays a great role at every stage of the project. It is inclusive of theprocedure needed to ensure that the completion of the project is within the boundary budget.Furthermore, it retains activities like cost estimation, controlling and resource planning. Theactivities are repeated at every stage until the end of the project. Cost management is engaged indetermining policies, processes, and documentation that are needed to conduct planning,controlling and implementing the project cost(Heagney, 2016). Cost management plan is themajor output of this entire process. It considers the planning process and budget controlling;along with this, it contains further activities so as to ensure that the project is cost-effective. Theoverall life cycle of the project is covered under cost management from starting phase to endingphase of the project. Cost management has high importance in the project as it evaluates controls and optimizes costsform a mere dashboard (Lock, 2017). It helps in establishing an optimal baseline for the project’scost expectations and actions to make sure that is the project is revolving under the budget.Further; it allows the project manager to conduct cost management activities like monitoringcosts on a real-time basis, so they are aligned with the budget. The strategies business should adapt to manage the project costs are effective: 4

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