Project Risk, Finance, and Monitoring: An Apple Corporation Analysis

This project report provides a comprehensive analysis of Apple Corporation's project risk, finance, and monitoring strategies. It begins with an executive summary highlighting the importance of project selection using the PRINCE2 methodology for continuous improvement, ensuring feasibility, accountability, and reliability. The report delves into cost management, emphasizing effective budget planning, control, and monitoring to reduce cost variance and achieve efficiency. It examines funding options, focusing on equity and debt finance, with an emphasis on Apple's approach to raising capital through investors. The report assesses the project's financial viability through NPV analysis, concluding with recommendations on the most effective financing methods. The introduction outlines the structure, including project selection, cost management, funding, and implementation, and evaluates share prices and NPV. Part A covers project selection with PRINCE2, cost management strategies, and funding options like debt and equity. Part B analyzes current equity capital, future cash flow, and NPV, and provides an assessment of the investment, concluding with the most cost-effective financing approach.

Project risk, finance and
monitoring

EXECUTIVE SUMMARY
This study has highlighted that, The project selection is an effective process which helps
in accessing the project idea with utmost priority. The project management of “Apple” will opt
for “Prince 2” which helps in continuous growth and improvement of the project. It helps in
ensuring the feasibility, accountability and reliability of the project to attain desired task in an
effective and efficient manner. Prince 2 methodology helps to persistently improve the
performance, oversee risk, enhance customer experience, value for money, empower business
change and support business outcomes.
Cost Management is an effective process which helps in effectively planning, managing,
controlling and monitoring the budget of the Apple corporation. Cost Management helps in
resource planning, cost estimating and cost budgeting which helps in reducing cost variance and
achieving desired task in an efficient manner.
Funding mainly focuses on Equity finance and Debt finance to acquire resources which leads to
long term growth and development.
Apple corporation focuses on raising capital through investors by giving them, shares. It
leads to large raise of funds for future growth and expansion. Apple corporation must invest in
this project because NPV of project is positive. This is a profitable investment. Debt financing
will be an effective option to finance the company. Apple will focus on refinancing with the help
of debentures and bonds.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
1. Project selection......................................................................................................................4
2. Cost Management....................................................................................................................4
3. Funding...................................................................................................................................5
4. Implementation and winding up..............................................................................................5
a.) ) Current equity capital issue, raise equity capital, Apple share price in 2019 and why has
this happened...............................................................................................................................6
b. i) Future Cash flow.................................................................................................................6
iii.) Assessment of investment in this project.............................................................................7
iv.) The cheapest way to finance...............................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The first part of the study will highlight project selection, cost management, findings and
implementation and winding up. This study helps in tracking the progress of the program which
leads to higher productivity for the business. The other part of the study will evaluate share price,
NPV which will help in effectively examining the project report effectively and efficiently.
PART A
1. Project selection
The project selection is an effective process which helps in accessing the project idea
with utmost priority. Project selection helps in measuring the positive results of the project. It is
an effective process which helps in selecting the right project which leads to accomplishment of
desired goals and objectives (Burtonshaw-Gunn, 2017).
The project management of “Apple” will opt for “Prince 2” which helps in continuous
growth and improvement of the project. Prince 2 method is an effective method which helps in
dividing project in a controllable and manageable stage (PRINCE2 benefits, advantages and
disadvantages. 2019). Prince 2 method helps Apple to interpret whether project is viable,
desirable and achievable. Prince 2 methodology is an effective process which helps in
productivity, flexibility and transparency. It is an effective approach which provides systematic
approach to carry out a particular project. (Hinde, 2018.) This method helps in adapting to the
dynamic changing environment. It helps in ensuring the feasibility, accountability and reliability
of the project to attain desired task in an effective and efficient manner. Prince 2 methodology
helps to persistently improve the performance, oversee risk, enhance customer experience, value
for money, empower business change and support business outcomes (Sadgrove, 2016).
2. Cost Management
Cost Management is an effective process which helps in effectively planning, managing,
controlling and monitoring the budget of the Apple corporation. This is an effective strategy
which helps in managing the income and expenditure of the business. This helps in managing the
finance of the company by allotting cost to each activity which eventually reduce the risk of
going over the budgeted plan. It helps in setting the baseline to make sure that the project is
based on the set budget. Cost Management helps Apple corporation in controlling cost, reducing

cost, ascertaining of profit and cost attached with each activity (Cagliano, Grimaldi and Rafele,
2015).
Cost strategic management helps in effectively analysing the long term and short term
profitability of the Apple corporation. It helps in effectively managing the expenses of the
company (Cost Management explained in 4 steps, 2019). Cost Management helps in resource
planning, cost estimating and cost budgeting which helps in reducing cost variance and achieving
desired task in an efficient manner. Cost Management enhance the performance of the project
which helps in effectively evaluating the cost assigned to each project in an effective and
efficient manner to reach higher sustainable growth. This leads to minimization of risk, lower
level of losses and higher profitability.
3. Funding
There are wide range of funding that are available which helps Apple corporation to
acquire resources:
Debt finance: Debt finance is an effective process which helps in raising money through
third party, which mainly includes credit union, bank, building society, bonds, bills, debentures,
etc. Debt financing is an effective strategy to pay interest on debt. Debt finance is also known as
financial leverage. This leads to higher interest rates the loans. The creditors has to pay interest
on the amount of loan. This is an effective funding option to raise capital from the market and
return within the stipulated period of time (Kerzner, 2017).
Equity finance: Equity finance is an effective method of raising capital or funds by
selling the shares of the organization. This is an effective source which helps in self- sourcing
within the business. There are various equity stock which can be divided into share capital,
preferred stocks, capital surplus, retained earnings, treasury stocks, reserve, stock options, etc.
The investor invest in the shares of the company to gain profit and dividend in return within
stipulated period of time. The organization sell shares of the company to investors and raise
funds. The investors of the company gain huge return and profits without any interest charges.
4. Implementation and winding up
Apple corporation focuses on choosing the best strategy which helps in higher sustainable
growth, operational efficiency and accomplish of the project in a timely and optimum manner.
Filling the gaps between formulation of plan and idea leads to implementation of the project in
an effective manner. p[roper integration of new and advanced digital technology helps in

implementing and accomplishing of the project on a timely manner. Effective teamwork and
coordination between all the departments helps in implementing the project in a systematic
manner. Proper synchronization of the activities in the organization helps in attainment and
accomplishment of the project on a timely basis (Lock, 2018). It also focuses on managing
interpersonal issues and resolve them quickly. Apple corporation focuses on keeping team
motivated. Use of effective software and tools to accomplish the set target and wind up the
project by effectively accomplishing the set target. Completing the project on deadline
successfully on a stipulated set budget helps in achieving the set target of the project. In case the
project has not achieved the set target and it has any deviation then necessary action must be
taken to achieve the desired goals.
PART B
a.) ) Current equity capital issue, raise equity capital, Apple share price in 2019 and why has this
happened.
Apple corporation focuses on raising capital through investors by giving them, shares. It
leads to large raise of funds for future growth and expansion. Price cut for iPhone has led to
lower profit margins for the company. The price cut down of 20% in China led to decrease the
share prices of the company. Apple corporation has lost 23% of market share due to higher
competition and price of the the iPhone has led to shift of customers to their competitors.
b. i) Future Cash flow
Year 0 1 to 3 4
∆NR - 1.80 1.80
∆OpEx - (0.36) (0.36)
∆EBITDA - 1.44 1.44
∆D&A - (1.00) (1.00)
∆EBIT - 0.44 0.44
(1-t)i.e (1-.30) - 0.13 0.13
∆NOPAT - 0.31 0.31
∆D&A - 1.00 1.00
∆CFO - 1.31 1.31
∆CapEx (5.00) - -
Working (5.00) 1.31 1.31
Cap Reccovered in the last
year - - 0.03

Salvage - - 2.00
Value 1.00 3.17 0.68
∆FCF (5.00) 4.48 2.28
ii.) NPV of the project
Year Future Cash Flows
0 (5.00)
1 to 3 4.48
4 2.28
NPV 1.76
iii.) Assessment of investment in this project.
Apple corporation must invest in this project because NPV of project is positive. This is a
profitable investment.
iv.) The cheapest way to finance.
Debt financing will be an effective option to finance the company. Apple will focus on
refinancing with the help of debentures and bonds.
CONCLUSION
From the above study it has been summarized that, Apple corporation must focus on
using strategic plan like Prince 2 to manage project. Apple corporation focuses on raising capital
through investors by giving them, shares. It leads to large raise of funds for future growth and
expansion. Apple corporation must invest in this project because NPV of project is positive.

REFERENCES
Books and journals
Burtonshaw-Gunn, S.A., 2017. Risk and financial management in construction. Routledge.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Cagliano, A.C., Grimaldi, S. and Rafele, C., 2015. Choosing project risk management
techniques. A theoretical framework. Journal of Risk Research. 18(2). pp.232-248.
Lock, D., 2018. The essentials of project management. Routledge.
Kerzner, H., 2017. Project management metrics, KPIs, and dashboards: a guide to measuring
and monitoring project performance. John Wiley & Sons.
Hinde, D., 2018. PRINCE2 Study Guide: 2017 Update. John Wiley & Sons.
Online
PRINCE2 benefits, advantages and disadvantages. 2019. [ONLINE]. Available
through:<https://www.knowledgetrain.co.uk/project-and-programme-management/
prince2/prince2-benefits>
Cost Management explained in 4 steps. 2019. [ONLINE]. Available
through:<https://www.costmanagement.eu/blog-article/198-cost-management-explained-
in-4-steps>