Project Risk, Finance, and Monitoring: A Case Study for Apple Inc.

This project analyzes project risk, finance, and monitoring, using Apple Inc. as a case study. Part A identifies project selection processes, cost management measures, and funding options for technology companies. It explores investment appraisal techniques like IRR and NPV, emphasizing their role in financial viability. The analysis covers cost management methods like budgeting and time tracking, along with debt and equity financing. It also addresses implementation and winding-up processes, highlighting the importance of research. Part B evaluates Apple Inc.'s performance, share price movements, and free cash flow, offering insights into the impact of management decisions on financial outcomes. The project includes financial analysis with NPV calculations and discusses how the share price is impacted by investor sentiment and company performance.

Running head: PROJECT RISK, FINANCE, AND MONITORING
Project Risk, Finance, and Monitoring
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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PROJECT RISK, FINANCE, AND MONITORING
Table of Contents
Executive Summary:........................................................................................................................2
Part A:..............................................................................................................................................2
i) Identifying the process where the technology company can use project selection:.....................2
ii) Evaluating the different level so of cost management measures that can be used for improving
the efficiency of the projects:..........................................................................................................3
iii) Analyzing the different level of funding is available to technology companies:.......................3
iv) Addressing the implementation and winding up process that can be used by companies:........4
Conclusion and recommendations:..................................................................................................5
Part B:..............................................................................................................................................5
Answer to question a:......................................................................................................................5
Answer to question bi:.....................................................................................................................8
Answer to question bii:....................................................................................................................9
Answer to question biii:...................................................................................................................9
Answer to question biv:...................................................................................................................9
References:....................................................................................................................................10

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Executive Summary:
The assessment has directly evaluated the process, which can be used by the technology
company for effectively improving their financial performance and generate high level of
income. The relevant analysis has indicated that overall financial performance of the company
can be improved for utilising relevant selection, cost management, funding, winding up and
implementation.
Part A:
i) Identifying the process where the technology company can use project selection:
The analysis directly identifies the process where technology companies for ensuring
high level of returns from operations can conduct adequate project selection. From the analysis,
it can also be indicated that with the help of investment calculations such as IRR (internal rate of
return), NPV (net present value) and payback period is used by organizations in technological
sector to detect the financial capability of the project. With the help of Payback period, investors
are able to understand the minimum time that will be taken by the project to return the initial
investment to the organization. Moreover, net present value directly utilizes the future cash flows
on the basis of time value of money and determines the present value of the inflows and profit
made by the project. In addition, with the help of internal rate of return managers able to
determine the level of income percentage that would be generated by the project over the period
of time. Thus, Apple Inc. can use the overall investment-appraisal calculation advancements in

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their project selection process, as it will help in detecting the most viable investment for the
organization (Nguyen et al. 2018).
ii) Evaluating the different level so of cost management measures that can be used for
improving the efficiency of the projects:
The cost management measures are considered to be one of the major techniques that are
used by organizations in the technological factors for improving the efficiency conditions of their
projects. From the relevant evaluation, it will be identified that with the help of time
management, budget planning, and time tracking technological companies are able to improve
the efficiency of the project by reducing the level of expenses that is incurred in the process of
completing the investment proposal. With the help of budgeting, organizations are able to
analyze the future cash flows, which directly link towards income and expenses. In the similar
process, the time tracking method would eventually allow the organization to determine the level
of efficiency that is maintained by the workforce deployed to commence the project. Moreover,
the time management analysis the different level of activities and determines the viable
opportunity that can be used for enhancing current productivity by reducing the time consumed
in completion of an activity. Hence, Apple Inc. can utilize the above cost management methods
for adequately improving the current efficiency and operations of the project, which can in turn
increase profits from the investment.
iii) Analyzing the different level of funding is available to technology companies:
The companies falling under Technology industry can use the different level of funding
such as debt financing and equity fund, which can eventually help them to complete the projects.

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Both the sources of finance can be used by companies effectively support the projects and
increase the level of Finance cost in the process. The inclusion of debt finance directly raises the
level of Insolvency conditions for the organization, as it directly increases the fixed finance cost.
In the similar process, overall project is financed by using equity capital the overall solvency
conditions of the company is relatively confined, which reduces the fixed finance cost and allows
the organization to take adequate steps to increase profitability and reduce cash outflows.
However, both the finance source has advantages and disadvantages, which might negatively
affect the overall profitability condition of an organization. Hence, from the analysis it should be
identified that Apple Inc. should relatively utilize debt financing, as the organizations current
financial conditions are relatively stable. This support from the debt finance would ensure the
timely commencement of the project, which can help Apple Inc. to gather the required profits
from investment (Burtonshaw-Gunn 2017).
iv) Addressing the implementation and winding up process that can be used by companies:
The research is an essential contribution that is conducted by organization before
initiating a project as it allows them to analyze the overall conditions and requirements for a
particular project. With the help of research, the organization is able to determine and analyze
the level of revenues and expenses that will be generated from a particular investment.
Therefore, it could be understood that major issues regarding the investment projects can arise if
adequately companies for the relevant projects not conduct research. Thus, the investment
appraisal techniques would also portray wrong valuation and results, which will not help the
managers to make adequate investment decisions. Therefore it should be understood that
research project is essential which is conducted by managers to determine the future financial

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viability of a project on which relevant investment appraisal techniques are conducted to
determine the benefits it would provide to an organization.
In the similar manner, companies conduct the winding up process when the tenure or life
of the project is over. Moreover, at the end of the project the overall capital expenditure are sold
for salvage value, while the balance is added as the cash inflow for the project. In addition, a
direct environmental damage is conducted in the winding up process, as it alternates the
landscape for future use.
Conclusion and recommendations:
Therefore, the analysis has indicated that the adoption of the above measures might help
Apple Inc. to generate high level of income from operations and reduce the level of risk involved
in investments. Hence, the process would secure the selection process, cost management
conditions and implementation problems of Apple Inc.
Part B:
Answer to question a:
The evaluation of Apple Inc. performance has mainly helped in detecting the overall
performance of the organization during the next quarter, which is intended to be problematic
from the point of view of investors. There is relevantly no intention of Apple’s management to
conduct share in near future, as the organization holds adequate level of cash to support its
operations. The analysis has directly stated that the overall performance of the organization is
directly dependent on the discounts that could be provided to the customers. Moreover, the

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further analysis has also indicated that the current sales conduction is not appropriate for Apple
Inc., which is directly affecting its capability to ensure the availability of adequate returns during
the end of the financial year. The anticipation of the investors has mainly alerted due to the low
revenue that would be generated by Apple Inc., due to the initiation of discounts that would be
provided to customers on the new product line. The level of changes in the anticipated revenues
of Apple Inc. has mainly led to the valuation from analyst, who predicted to the decline in the
company share price. Hence, it can be detected that the there was no intention of the
management to issue more shares, as the share price was influenced by the management
decisions on the adoption of discount on the current product line.
The equity finance directly allows the organizations to acquire the required level of
capital, which can directly fuel their growth prospects. Hence, company only conducts equity
financing when they plan to increase their productivity and operations, which can directly
support their future operations. Ho (2018) indicated that with the help of equity financing
managements are able to finance their operations by not increasing the level of solvency
conditions.

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Figure 1: Share price of Apple Inc.
(Source: Finance.yahoo.com 2019)
The share price movement of Apple Inc. is mainly depicted in the above graph, which
indicates about the relevant price actions that have been conducted by the organization during the
financial year of 2019. The analysis has indicated that share price of Apple Inc. has been
witnessing high level of growth during the 2019 year. The share price has witnessed a high of
211.84 on 3rd May 2019, while low of 142.00 was achieved during 3rd January 2019. This
directly indicates that the share price of Apple Inc. has been witnessing higher highs and higher
lows during the tenure of 2019. In addition, the evaluation has also indicated that, as the as the
news of decline in the anticipated revenue was disclosed by the management to the shareholders
then total share price value of Apple Inc. mainly declined during May of 2019, after achieving
the yearly high. The share price declined to the levels of 173.30 in 3rd June 2019, where the share
price of the organization started to increase again in the month of June, where the value has risen
to the levels of 190.15, as the valuation of Apple Inc. has increased after the panic from investors
subsided.
Therefore, performance of Apple Inc. is directly reflecting on the overall share price of
the organization, which is altering due to the changes in the demand and perspective of the
investors. The relevant news of the Apple Inc. is directly reflecting on the fear of the investors,
which affecting the share price valuation of the company. The decision of the management to
adopt discounting measures for increasing the level of sales volume directly affected the total
income that might be generated by Apple Inc. during the first quarter. This would negatively
affect the financial performance of the company and reduce the level of returns that could be

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provided to the investors. Hence, the valuation Apple Inc. was reduced, which was witnessed
from the relevant fall in share price during the month of May.
Answer to question bi:
The free cash flow of the project has mainly evaluated in the above table, which helps in
determining the level of cash that would be generated from the proposed project. In addition, the
analysis has also indicated that there is a positive indication from the proposed project, where
cash flow of the project is higher than the actual investments that were conducted during the
initial year. The analysis has also indicated the overall indication investment comprises the
overall capital expenditure and working capital, which is required by the project for effectively
starting the operations. However, the overall cash flow conditions have directly detected the
financial performance of the project, which can help in generating high level of income in the
long run. Therefore, from the evaluation, it can be detected that total cash inflow is at the level of

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$3,699,000 in year 1 to 3 and $3,263,000 in year 4, while the initial investment is at the levels of
-$5,030,000.
Answer to question bii:
The analysis has directly indicated that the overall NPV value has indicated a positive
value, which can generate high level of income from operations in the long run. The cash flow of
the project has been discounted with relevant cost of capital to determine the time value of future
cash flows and generate higher revenues in the process. Burtonshaw-Gunn (2017) stated with the
help of investment appraisal techniques the companies are able to segregate projects in
accordance with the level of income that it could generate in the long run and improve firm value
in the process.
Answer to question biii:
From the analysis of the investment appraisal techniques that has been evaluated in the
above table, it can be directly concluded that relevant investments needs to be conducted on the
project, as it will allow Apple Inc. to increase their firm value in the process.

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Answer to question biv:
The evaluation has directly indicated the equity finance is not considered to be the
cheapest, as expected return of the investors could be high, which might negatively impact the
finance cost of the company.
References:
Burtonshaw-Gunn, S.A., 2017. Risk and financial management in construction. Routledge.
Finance.yahoo.com. 2019. Yahoo is now part of Oath. [online] Available at:
https://finance.yahoo.com/quote/AAPL?p=AAPL [Accessed 9 Jun. 2019].
Ho, V.H., 2018. Sustainable Finance & China's Green Credit Reforms: A Test Case for Bank
Monitoring of Environmental Risk. Cornell Int'l LJ, 51, p.609.
Nguyen, N.M., Killen, C.P., Kock, A. and Gemünden, H.G., 2018. The use of effectuation in
projects: The influence of business case control, portfolio monitoring intensity and project
innovativeness. International Journal of Project Management, 36(8), pp.1054-1067.