Project Management & Control

1 . Describe briefly the aspects of a business environment that needs to be monitored as well as the dimensions along which a firm may appraise its strengths and weaknesses for identifying investment opportunities.

2 . The sales of a certain product during a 14 year period have been as follows:

Period

Sales (Rs)

Period

Sales (Rs )

1

2,000

8

4,000

2

2,200

9

3,900

3

2,100

10

4,000

4

2,300

11

4,200

5

2,500

12

4,300

6

3,200

13

4,900

7

3,600

14

5,300

Find out the least square regression line for the data given.For the data given above assume that forecast for the period 1 was Rs 2,100. if the constant (α) is equal to 0.3 , derive the forecast for the periods 2 to 14 .

3 . What is Project Implementation Schedule? How it is important ? What information is required for preparing the project implementation schedule?

4 . What are replacement decisions? Explain three components of the cash flow stream of a replacement decision.

5 . A company is considering an investment proposal to install new milling controls at a cost of Rs 50,000. The facility has a life expectancy of 5 years and no salvage value. The tax rate is 35 percent. Assume that the firm uses straight line depreciation method and the same is followed for tax purposes. The estimated cash flows before depreciation and tax (CFBDT) from the investment proposal are as follows:

Year

CFBDT

1

Rs 10,000

2

Rs 11,000

3

Rs 12,500

4

Rs 13,500

5

Rs 21,000

Compute any three of the following

(i) Payback period

(ii) Accounting Rate of Return

(iii) IRR

(iv) NPV at 10 % discount rate.

(v) Salvage value at the end of year 3 if plant ceases operations.

6 . (a) What are key issues considered by financial institutions while appraising a project for term financing?

(b)...