Project Risk, Finance & Monitoring - Desklib

Running head: PROJECT RISK, FINANCE & MONITORING
Project Risk, Finance & Monitoring
Name of the Student:
Name of the University:
Authors Note:

PROJECT RISK, FINANCE & MONITORING
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Executive Summary:
The overall assessment mainly focuses on explaining different level of project selection, cost
management, funding and implementation and winding up. These explanations would
eventually allow organisation to maximise the level of return from investment. The
assessment also aims in evaluating the current financial position of Myer and detecting why
its current market value is declining. The relevant project for Myer is evaluated, which could
help in generating high level of return form investments. Adequate net present value is used
in understanding the level of return from investment, which will be conducted by Myer.

PROJECT RISK, FINANCE & MONITORING
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Table of Contents
Part A:........................................................................................................................................3
Part B:.........................................................................................................................................6
a) Depicting whether Myer currently have equity capital on issue, while discussing why
companies raise equity capital and stating why Myer’s equity capital dropped so much in
2018:...........................................................................................................................................6
b.i) Calculating the free cash flow in the Australian dollar to the project:................................6
b.ii) Calculating the NPV in Australian Dollar for the project assuming the cost of capital of
5%:.............................................................................................................................................8
b.iii) Depicting the change in NPV value if the Canadian dollar depreciates against AUD:....8
b.iv) Providing relevant recommendation to Myer board regarding the project:......................9
Reference and Bibliography:....................................................................................................10

PROJECT RISK, FINANCE & MONITORING
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Part A:
Project Selection:
The project selection process is an adequate measure, where the organisation needs to
accommodate adequate measure and techniques for understanding the relevant returns from
investment, which could be generated from projects. The use of investment appraisal
techniques could eventually help in understanding the level of returns, which could be
negated from a particular project. Investment appraisal techniques such as Net Present Value,
Internal Rate of Return, Payback Period and Profitability Index can be used in understating
the finial viability of a particular project. These measures also help in evaluating different
projects and understand their capability to maximise their profitability and minimise risk
from investment. In this context, Baum and Crosby (2014) stated that with the help of
investment appraisal techniques companies are able to pick the most profitable project, which
could generate high rate of return from investment. On the other hand, Li and Trutnevyte
(2017) criticises that investment appraisal techniques mainly loses its fiction if the
assumptions made for the analysis is not adequate, which would directly nullify the results
obtained for the projects. Therefore, with accurate assumptions, discounting rate, and cash
flow projections companies can use the investment appraisal techniques for identifying
financial viability of the project. Rio Tinto before accepting a particle project mainly use
different level of investment appraisal techniques for selecting the project.
Cost Management:
Cost management is an effective measure from which business are able to minimise
the total expenditure and maximise their profitability. The measure also helps in
understanding the level of expenses, which could be conducted for minimising any kind of