Thanks to visit codestin.com
Credit goes to www.scribd.com

0% found this document useful (0 votes)
90 views9 pages

Project Management Individual Assignment

1. The document is an assignment prepared by Bezawit Abrham for their instructor Laeke S. on project analysis and evaluation. It was submitted in April 2020 in Addis Ababa, Ethiopia. 2. The first steps outlined are to survey the project charter to understand the high level details and objectives, and then conduct a SWOT analysis to identify strengths, weaknesses, opportunities, and threats to help guide project planning. 3. The key differences between a business plan and feasibility study are that a feasibility study determines the viability of an idea while a business plan outlines the operations if the decision is made to proceed, and a feasibility study analyzes risks while a business plan explains how management

Uploaded by

Beza Abr
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
90 views9 pages

Project Management Individual Assignment

1. The document is an assignment prepared by Bezawit Abrham for their instructor Laeke S. on project analysis and evaluation. It was submitted in April 2020 in Addis Ababa, Ethiopia. 2. The first steps outlined are to survey the project charter to understand the high level details and objectives, and then conduct a SWOT analysis to identify strengths, weaknesses, opportunities, and threats to help guide project planning. 3. The key differences between a business plan and feasibility study are that a feasibility study determines the viability of an idea while a business plan outlines the operations if the decision is made to proceed, and a feasibility study analyzes risks while a business plan explains how management

Uploaded by

Beza Abr
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 9

Addis Ababa University

College of Business and Economics

School of Commerce

Department of Accounting and Finance

Assignment on Project Analysis and Evaluation

Prepared by:

Name: Bezawit Abrham

Sec: E4A1

ID No.: BEE/1370/09

Submitted to: Instructor Laeke S.

April, 2020

Addis Ababa, Ethiopia


1. The first thing I would do is surveying the project charter to comprehend the elevated level
data about the undertaking. Project charter is a formal, typically short document that
describes the project in its entirely including what the objectives are, how it will be carried
out, and who the stakeholders are. We can understand from the question that project planning
is going to start which proposes that project inception has been finished. The project charter
is made during the Creation of project charter process as a component of undertaking
inception. The project team utilizes the project charter as a beginning stage for introductory
project planning. The sort and measure of data in the project charter shifts relying upon the
multifaceted nature of the project and the data known at the hour of its creation. At least, the
project charter ought to describe the significant level data about the project that will be
expounded in the different segments of the project management plan. The next step is to find
out their needs.
Then I would do is a SWOT analysis. SWOT stands for Strengths, Weaknesses,
Opportunities and Threats.
Strengths would be the company's existing competitive edge, employees, processes, product
quality etc.
Weaknesses would include any shortcomings or lacunae which cause it not grow. These are
the internal limitations.
Opportunities would include the market related external opportunities such as ability to
attract new customers, add and create value, earn higher profits, and so on.
Threats would be related to risks in the project. Risk management planning can be done
using this analysis. Further, resources and manpower planning can be done using this
analysis. It would thus be the foundation for the expansion project.
2.
A: The trend equation
Month(t) Application (Yt) tYt t2
1 40 40 1
2 42 84 4
3 30 90 9
4 28 112 16
5 26 130 25
6 32 192 36
7 34 238 49
8 36 288 64
9 40 360 81
10 40 400 100
11 42 462 121
12 46 552 144
∑t=78 ∑Yt=436 ∑tYt=2,948 ∑t2=651

b1=n∑tYt-∑t∑Yt
n∑t2-(∑t)2
=12(2,948-(78 x 436)
12(651)-(78) 2
=35,376-34,008
7,812-6084
=1,368
1,728
b1=0.7916
b0=Ȳ-b1t → Ȳ=∑Yt=436=36.33 t =∑t=78=6.5
n 12 n 12
=36.33-(0.7916 x 6.5)
b0=31.1875
Trend Equation
Tt= b0 + b1t
=31.1875 + (0.7916 x 13)
=41.4791
B: 3-month moving average
Jan Sales = (40+42+46)/3
= 42.67
C: 6-month weighted moving average
Jan Sales = (0.05 x 34+0.1 x 36+0.15 x 40+0.20 x 40+0.20 x 42+0.3 x 46)
= 41.5
D: Exponential smoothing
Jan sales = Ft + Alpha (At-Ft)
= 36+0.3 x (46-36)
= 39
E: Trend Equation method
Tt= b0 + b1t
=31.1875 + (0.7916 x 15)
March sales = 43.0625

3. Business plan details how the business will operate and assume that the feasibility study has
been completed and it was determined the idea was viable. Feasibility study is usually done
before the beginning of the business and involves making sure that the business idea is
feasible or advisable.
 Similarities between business plan and feasibility study;

 Both are initially done before the start of the business and can be conducted in the future
to determine the next step for the growth of the business.
 Both involve inputs from several individuals or departments with different skills and
ideas.
 Both involve other documents that are pulled together in order to compose the reports.
 Both aid the business management in making decision and can be shown to potential
investors.

 Differences between business plan and feasibility study;

 Feasibility study determines if to proceed with the business or the idea whereas
business plan are designed after the decision to proceed have been made.
 Feasibility plans are research project whereas business plans are future projections for
the business.
 Feasibility studies determine the risks associated with the idea whereas business plan
explain how management will deal with risks to make profits.
4.
1. Net Working Capital = 2010 = 1250
2011= 22138.89
2. Increase in Net Working Capital = 20888.89

Calculation of Net Working Capital

Particulars Minimum 2010 2011


coverage
Cash 60 40,000 45,000
=40,000 x 60/360 =45,000 x 60/360
6666.67 7,500
Raw material 20 60,000 70,000
=60,000 x 20/360 =70,000 x 20/360
3333.33 3888.89
Account receivable 35 100,000 120,000
=100,000 x 35/360 120,000 x 35/360
9722.22 11,666.66
Work in process 10 15,000 17,000
=15,000 x 10/360 =17,000 x 10/360
416.67 472.22
Finished goods 40 80,000 100,000
80,000 x 40/360 100,000 x 40/360
8888.89 11,111.11
Total current asset 29,027.78 34,638.88
Account payable 50 200,000 90,000
=200,000 x 50/360 =90,000 x 50/360
Total current liability 27,777.78 12,500
1. Net-working liability 1250.00 22,138.88

2. Increase in NWC= 22,138.88-1250.00


=20,888.88
5. Preparation of Income Statement

Unit 400,000 440,000


Particulars 2010 2011
Revenue: Sales @100birr 40,000,000 44,000,000
Expenses: Cost @ 65birr 26,000,000 28,600,000
Depreciation 50,000 50,000
Interest on short term loan 5000
Interest on long term loan 36,000 36,000
Profit before Tax 13,914,000 15,309,000
Tax 30% 4,174,200 4,592,700
Profit after Tax 9,739,800 10,716,300
Dividend payment 3,895,920 4,286,520
Note: preliminary expenses being capital expenditure which may be written-off over period of
years. Normally preliminary expenses are treated as intangible asset and shown on the asset side
of balance sheet depreciation to be charged on SLM method, so depreciation=500,000 = 50,000
10
6. NPV= ∑CFn-Initial investment
(1+i)n
Period CF Pf NPV
Y0 -10,000 -10,000 -10,000
(1+10.5%)0

Y1 4,400 4,400 3,981.900


(1+10.5%)1

Y2 4000 4,000 3,275.936


(1+10.5%)2

Y3 3,500 3,500 2,594.067


(1+10.5%)3

Y4 500 500 335.367


(1+10.5%)4

187.27

IRR- let’s try with 11%


0=NPV= ∑CFn-Initial investment
(1+IRR)n
Period CF Pf NPV
Y0 -10,000 -10,000 -10,000
(1+11%)0

Y1 4,400 4,400 3,963.9639


(1+11%)1

Y2 4000 4,000 3,246.4897


(1+11%)2

Y3 3,500 3,500 2,559.1698


(1+11%)3

Y4 500 500 329.3654


(1+11%)4

98.9890

Period CF Pf NPV
Y0 -10,000 -10,000 -10,000
(1+12%)0

Y1 4,400 4,400 3,928.5714


(1+12%)1

Y2 4000 4,000 3,188.7755


(1+12%)2

Y3 3,500 3,500 2,491.2308


(1+12%)3

Y4 500 500 317.7590


(1+12%)4

0
Payback period is greater than 2 years since cash flow =4+4.4 = 8.4 while initial investment = 10
mil so this criteria is not met
As we can see, the rest of the two criteria (NPV and IRR) are met and hence, the project
7.
I) Effective Demand for each year = (Beginning Inventory - Ending Inventory) +
Production + (Export - Import)
Where (Export - Import) gives the Net Export and (Beginning Inventory - Ending inventory)
shows the consumption.
In 2017, Ending Inventory = 9 Units;
Beginning Inventory of 2017 = (9/0.75) = 12 Units
The following table represents the calculations of effective demand for each year:
Beginning Inventory of each year = Ending Inventory of Previous year

Demand(y) Production import Export Ending inventory Effective demand

2017 12 50 20 30 9 63
2018 9 65 25 40 10 79
2019 10 72 72 45 8 96
II) Trend Projection: Finding the demand function:
We can find the demand equation for the Year Vs . Demand data using the regression
(Least square method) method.
Y = b + m.X
Where Y = Demand; X = Year
Where the Slope m = (n Σ xy - Σx Σy ) / ( nΣx2 - (Σx)2)
Intercept b = (Σy - m Σx) / n
The following table shows the calculation of slope and intercept:

Year(x) Demand(y) x^2 y^2 xy


2017 63 4,068,289 3,969 127,071
2018 79 4,072,324 6,241 159,422
2019 96 4,076,361 9,216 193,824
6054 238 12,216,974 19,426 480,317

m 16.5
b -33,217.7
Demand Equation is given by:
Demand = -33,217.7 + 16.5 *Year
For the Year 2020,
Demand = -33217.7 + 16.5 * (2020)
Demand 2020 = 112.33 ~ 112 Units (Approximately)

You might also like