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

This report provides a comprehensive analysis of project risk, finance, and monitoring, focusing on a case study of Apple Inc. It begins with an executive summary and then delves into Part A, which explores project risk management principles and their application within the technology company, including investment appraisal techniques like payback period, internal rate of return, and net present value. The report also examines cost management measures and financing options, such as equity and debt financing. Part B conducts a capital budgeting analysis for Apple Inc., evaluating cash flows, net present value, and project viability. The report concludes with recommendations for Apple Inc. to improve its project selection process and financial strategies. The report also highlights the importance of data authenticity in decision-making and the processes involved in project implementation and winding up.

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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Table of Contents
Executive Summary:........................................................................................................................2
Part A:..............................................................................................................................................2
Conclusion and recommendations:..................................................................................................5
Part B:..............................................................................................................................................5
Question a:.......................................................................................................................................5
Question bi):....................................................................................................................................7
Question bii:.....................................................................................................................................8
Question biii:...................................................................................................................................8
Question biv:....................................................................................................................................8
References list:.................................................................................................................................9

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Executive Summary:
The relevant analysis has been conducted on the procedure that could be used by
companies falling under the technology industry. The evaluation has been conducted on the
specific segments of the operations that need to be conducted by the technology company for
ensuring the section of an adequate investment option.
Part A:
Analysing the method used by Technology Company by identifying the selection process:
One of the major processes that need to be used by technology companies are the
selection process, as it eventually helps in detecting the adequate projects, which could support
the financial performance an organization. The evaluation is directly indicated that with the help
of investment appraisal techniques such as payback period, internal rate of return, and net present
value organizations are able to identify the financial viability of a project and determine the
impact on its revenue generation capability. Technology companies for efficiently evaluating a
project and the prospect it brings to the organization relatively use investment appraisal
techniques (Burtonshaw-Gunn 2017).
Therefore, Apple Inc. can efficiently utilize the investment appraisal techniques for
detecting the financial performance of a project. The payback period directly provides
information about the overall time that will be taken by the project for accumulating the overall
initial investment. From the analysis, it is detected that investments in the project would
eventually help in determining the overall performance that will be generated by the project over

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the period of time. With the help of internal rate of return, the managers are able to gather the
information regarding the income of percentage of income that will be generated by the project
over the period of time. Lastly, with the help of net present value project’s valuation is
determined, which can eventually help in protecting the time value of future cash flows that is
generated by the project.
Evaluating the cost management measure that can be used companies falling under the
technological sector:
The different level of cost of management measures that is utilized by technology
companies for effectively improving the financial viability of a project. The different measures
that can be used by the organization effectively reducing the expenses that might be conducted
on the completion of the project. Measures such as time tracking, time management and budget
planning which can be used for effectively increasing the financial performance of the particular
project. The future cash flows of the company is relatively evaluated on the measures of the
above cost management system which eventually helps in improving the financial performance
of the project and reducing any kind of excess of expenses that might be incurred over the
timeline of the project (Tonchia 2018).
Apple Inc. can utilize the cost management system to improve the efficiency of the
selected projects. From the analysis it is determined that with the help of Cost Management
overall financial performance of the project is improved by reducing the level of expenses that is
entered in the process. Moreover, budgeting and time management would eventually help reduce
the level of cost factors that is affecting the project financial perspective.
Detecting the different level of funding that can be used by companies falling under the
Technological sector:

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Technology Company uses two different types of financing measures that allows them to
secure the level of operations over the period of time. Equity financing and debt financing are the
relevant sources of finance that is used by companies to effectively commence the projects that is
selected from the above process. Moreover, Equity financing is mainly used for big projects,
which require hefty amount of Investments in the initial year. Moreover, the debt financing is
directly utilized by the organization only when small projects are presented which can eventually
help the organization to reduce the cost involved in equity financing and acquire the project
efficiently without any hassle or excess expense on sources of finance.
From the relevant evaluation, it could be identified that Apple Inc. can utilize equity
financing for effectively securing the relevant amount for initiating the project. Jaipur Station can
effectively utilize the equity financing conditions for effectively improving the current efficiency
conditions of a project and produce any kind of risk involved in investment. However, it could be
understood that equity financing will require additional expenses and time for gathering all the
relevant findings for the overall project.
Determining the process of implementation and winding up:
There is a music concern regarding the prerequisite measures that is used by the
organization before initiating the overall project. The research that is conducted by the
organization needs to be evaluated for efficiency and reliability as it is the base on which the
overall investment appraisal techniques are being deployed by the organization. Hence,
authenticity of the data is required as it would directly affect the decision making process of the
management on the basis of the results provided by the investment appraisal techniques.
Therefore, it could be understood that detection of the research conducted for a particular project
is crucial for an organization (Dorobantu, Müllner and Salomon 2018).

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The winding up process directly includes different level of measures that needs to be
conducted by the organization effectively closing the project after the completion of the tenure.
This winding up process relatively leads to the selling process that needs to be conducted for
particular machinery and other assets of the project, which help in determining its actual salvage
value. The drastic impact on the environment after the project completion as the layout of the
asset relatively changes due to the selling process of all the relevant machineries and other
components used in the project.
Conclusion and recommendations:
The analysis of the above measures has directly indicated that Apple Inc. should use the
appropriate investment appraisal techniques for improving their current project selection process.
Hence, the process can allow Apple Inc. to minimize the risk involved in a project and increase
the level of profits that might be generated from the process.
Part B:
Question a:
The analysis as indicated that there is no possibility of any kind of share issue that the
management of Apple Inc. after evaluating the overall case study will conduct it. Therefore, from
the relevant analysis, it is determined that the overall anticipation of future revenues of Apple
Inc. was reduced due to the implications of discounting measures used by the management to
boost sales of their products during the last quarter of the Year. This is the main reason why the

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shareholders unhappy and started to sell the shares to determine the actual value of the company
in comparison to the current valuation of their forecasted revenues (Harris 2017).
Equity financing is an adequate measure that is used by organization to support its future
endeavors where it intends to increases the level of operations. The companies use equity
financing to minimize the exposure to their insolvency conditions, which can be conducted by
debt financing.
Figure 1: Share price of Apple Inc.
(Source: Finance.yahoo.com 2019)
The share price of Apple Inc. has directly indicated about progress that has been made by
the organization during the financial year of 2019. From the relevant analysis, it is determined
that Share price of the organization started to increase from January itself and reached a peak of
210 during the month of May. Moreover, the report that was presented to the shareholders of
Apple Inc. about the discount and the decline in revenues that would be included in the next

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quarter has resulted in the decline in its share price. This can be witness from May to June where
share price of the company continuously declined from the levels of 210 to 175. The straight line
was relatively held at the levels of 175 where after which the increment in share price started,
while its current pricing is at the levels of 190.15.
Question bi):
The calculations in the above table have directly provided all the relevant cash inflows
and outflows that will be generated by the project of the period of 4 years. From the relevant
analysis, it is determined that the overall income of the project is relatively higher in comparison
to the cash outflows that were conducted in the initial years. This determination is relatively
helpful in evaluating the investment appraisal techniques, which allow organizations to
understand the financial viability of a particular project (Lock 2018).

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Question bii:
The calculations also represented the overall net present value of the project, which is
depicted in the above table. The positive NPV value has directly indicated Daddy project will
provide higher returns in the long run and allowed the organization to increase its firm value.
Question biii:
After validating the projects financial viability and investment appraisal value it be
identified that Apple Inc. should commence with the project, as it will increase revenues of the
organization in the process.
Question biv:
There is no consideration regarding the detection of cheapest form of Financing that can
be used by organizations to reduce their cost of capital. The lowest interest rate is considered to
be the cheapest form of Finance, which can be provided by equity financing or debt financing.
However, the NPV value of the project will be impacted if Bond financing was used, as relevant
interest rates would alter the NPV, due to the finance cost involved particular source of finance
(Weber, Alfen and Staub-Bisang 2016). However, the project will only be viable if the cost of
debt is within 12% or else the project will be rejected.

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References list:
Burtonshaw-Gunn, S.A., 2017. Risk and financial management in construction. Routledge.
Dorobantu, S., Müllner, J. and Salomon, R., 2018, July. Pricing Institutional Distance: Project
Finance in Different Institutional Environments. In Academy of Management Proceedings (Vol.
2018, No. 1, p. 17846). Briarcliff Manor, NY 10510: Academy of Management.
Finance.yahoo.com. 2019. Yahoo is now part of Oath. [online] Available at:
https://finance.yahoo.com/quote/AAPL?p=AAPL [Accessed 10 Jun. 2019].
Harris, E., 2017. Strategic project risk appraisal and management. Routledge.
Lock, D., 2018. The essentials of project management. Routledge.
Tonchia, S., 2018. Project Cost Management and Finance. In Industrial Project
Management (pp. 153-170). Springer, Berlin, Heidelberg.
Weber, B., Alfen, H.W. and Staub-Bisang, M., 2016. Infrastructure as an asset class: investment
strategy, sustainability, project finance and PPP. John wiley & sons.