PROJECT MANAGEMENT PGOCOCHOOHOHCCHOOHOKROOOPOOCOROLI L252,SOCSCOCOCHSEHCOSKGOOCOCBOLU LLLTIO @ €SCLO000G O mopaee 9 ©0003 @ ve GE wo LX LOO IO ce C PROTECT MANAGEMENT What in @ Project 2 A project ie accomplished by perforin a sek snleveelobed activities“ over a finted period gf Hime within a certain cast and — apecificalions. Defination J Project by Hawison — A- Project cen be classified a0 a 8p wouline, work with discrete tin oP eing fivncal non vepehtive and technics! performnanes . gools oe eg © Conshuction 4 a build, Py up o power Plank, developing sof | Clawificalion Srjeck — E Clowificaton on Hav bovin J p rsjeck complelion Hime » Io duraign SpRject Ceamplekion Hme 778 yeors) 2) Medium een projet C3 be 8 yom) . 3) Sho Peroton projec cl te 3 gears) 4) Special short duration project cs Vigan) T Classification on the bavie of project, value — (> {000 Groves) “Texeno > Mega value project ») large velue projecr C too = Lee crores) 3) Medium value yy Small value pryect C& feveve) project © [= 1007 croves) | i i | | | | |3) On the baoio of _Quonevship ~ v Governtnent sector pojets ( Pso or Psé) 2) Private bec hor projects 3) Public privete partnership [ Viability ar ferding aod sector projets) 4) Oo the banio | Type 4 {dork » Sadualnal |p wa) ects C to ack up an indudby ge be rape qu: eS a a os re ace i 5) On’ the base + Dunakin [Find wp 3) Nowa) type “os ay Fastheck pret oy normal. Project — Proyack taken Fastback Prejeck Pagject oe estimated time: se iar bo Menger? people bg ather aecomplish @ oon oy oe vailable vosavce> ffectvey ord effici ently ny es de’ ouing completed before, _nennel yesources ave considered ~ a) Homan Reroarss by Time Resquree } Einandel Resource Mechonicel / Machinary Reaourea, 9 2) Techrelog 4 Resoures °) (ofurel Resource ’ ee Hime fo completes Ber cera 02.0098 80200000990009-90938a that io Projech Mana eok A jk iw an appl’ cation * 4 knouled goats eda a Fechnol ogi eo ( KsTT) be meek Vhe project vequivenest to use the ophenury_ yesources 40 0 to The objeckive io took either in minimum cosk ov in complete. the minimum Hee: Process | _ Phases sj Project Management Project Iniakion ov Project Formelahion Project’ App raizel 25 Project Planning se « Pasjeck scheduling Q : Prsjeck Smplementalion 9 . Projech corked or mot Pasjeck complehon & O88 €OHO0BS OO HOW] 6 6 Do~NH ~ Prjeck Evaluation , + — a Project Manager Catmbutes ) an effective paw _ manag ey should bheve the fawn _ C » Planning ange ronigatione! alall » 2) CornrnihQ iy and leaderehip lil _ CB Decision making “i . projec maria: w+ tools oO uw) knouled ge lls G 5) Resource docahon «kil a) Negohation alelle + ia) Tie mnenegemert tile“The intensity 4 H# Whot io Project Vide Cycle PLE) — 4 Exex, prec has certain phases The undevatandieg -4 phases halpa io mositoving ond contol. Q . All the phase—frora shore bo end are lige eyste phases development: known 80 The umber of phase The four jmporkant phases o] PLe ere Sos — Phase 1) 7 Feasibility phase | Concepkon 2 opp raizel phare : s W% and the Sp the akeqe the wject 2 iA Ry he rage pre) Pui ahd and jdeoo ore Concieved after “maki. and commerical anelgtia iaeoliny the objective dees ade: SY . this phase we — are ma Te Important feahaeey Sdenkifying Fe, aphre > i d ageQvstadien 3) Make Takin ey ; a AP cpeston and schedules deciatons: a v the boundaries 5) seting vp as _inihakiakion alep from the eee io also known he prare | atege activity increapes Phese: mou afer dem pays to prgect. ov outline 9 fhe prgect- . ne, OOF GROCOGRDABOOOOOGE —t co peor naecnsOe emere@e woos e pene ® NO DAO GO Sl Ss oe iw Jntensi ~ ' \ ae 4 4 Fsjes face aopleg Commiaaioning Work PLe > F time — Phare=2 } Design - phose C planning and sWlng phase) Once the «investment decision bas eGo the dai phooe aborts. NS ‘ Jn this phase the original “i five _phace ove amplified to prepare Blueprinks gor next phaoe oS technical parameters ond by design sbandards ave x decided, Coat and fimgn@r® eslimabed in deteil. however comeline The dcheduling fol! by planni may be wont Ger ave idenbified which ave needed fps and the delailed — vepext 4 design Pree which & called a2 detailed project Qt © DPR) DPR bv gerther examined by Frm 2 phase fo phase J Plc » intensity 4 activities continously I nevearer- Implemenkahon Phase (Execuhion ond prododio concenerd organigalion Phave-3 : phare) . The 3° phaoe stats where physical shape > given te jdeas conceed in earlier phase. Jn hes phase>have -4 “3 io the look phe of & pryeck cycle completed and hs iPr om a one durin 4 yesourced is done and there procurement greet need continous monitoring and conhel al) the aetvities In thio phase: J 4 ooade 0oe In this phase the project tnanag er will experience the, peak demand: - The intensity achvities isihally increases, which reaches then decreaves fo hs peak and phase (Completion & Having, Phere) Comm) 4éionin Sining wehich actvikes ave problem. on we hid to 44 ‘a then coremissioni t the commissioning Coscoecenosn0ese b completes After comniaioring | H ae handed over, This ata might Me jo operabions and maintenane dn tke phooe as aetnikien conbinoualy deerean i the end. Jlehon and veache Brien & Pavamele: hich- project compe ehers ubich- added peje + + Elements gh Le C operations and Ackvilies C maintenance) . ; Every 4 ackvihy should be performed to C G park exlen = and © thak — sequens® Abou S : maint ained- a Resources ~ c ——— “he avenlabilFy 4 hemen vesouren, material resource, ‘ coachinary yesourer whenever required. . ; : ‘ v1@ eee. “Ar O OMTtNEa ww a qe project manag _ The edfect describes ar 0B O O020DD S$ I HPODDG — 7 %. Extemal Condi tons C Conshrainks) 3k includes nokural doctors Uke flood, earthquake and artifical foctors like “power ov ply breakdown, healhh hagards poliey oe changers Halo Effect = je we an asaumplon Hat the because od at technolony, and fechnicad killa he will be the _ person b ewey i0 in - which one makes 99 Inference about a pet ast, Who ts ulhmabe) ceonitle BO%ee 2 a) Tearn members) Prajecky rearing ev ey Budily manger oS we Quality Engine vena” an sf aahould 4 adeched ond vig eI" Sealy a mi ory ne the “ag a) Design Ska we ay ° bec Qh haga, 4) Cormpletion 4 design a gf pee the inkenaby 4 activily b as. Sn which phove mar mum 7 a) FS +) desi LA Semplementation )} Corominttoring .a Auarge the fellosiny clenots J pjech cyt in coweet ovdey = a) Project agprotdol ect 4electon 8) Feasibility anal yas d) Project execution ©) Prej si OW O © @ ay o) - 3s © x! Oo . & x = se s we - > Ceoeeooecooonogaccs0e20aa “ACCC CA“IO @ GHO0S © OHWUWDI 8 OMONVe PROJECT FORMULATION -& Appraisal DPrject Formulaton — : #Gt tm the process by which one obtains @ complete. pichre about a “prsject being. under faken- # The Bndomnalion “ealected Hreugh thin process enn be used ger preliniriens pereenin: 4 projects. The gorvelatio aude ray vary fen prgjec Fo project. Faltoming aopech ave consideved 40 project dormdatton — “y Concephaizaton . Projeck iden Oy 5 2» Concepval validity f rye id gt. means the concieved project dea io examined its validation, SH ray heppen that with the VW level of bechoolg yk w& nek feasible bo comple ¢ prgjech idea. 3). Making aaseasment 4 reg Srtmeck Ahad be Ua JeABerboken | when there is dofficier per | should evidence ph, iene y Pagect song Si 5) Technical ee Techn an fe be evaluated fem the point 4 View 4 available vesources and material. 6) Financial appraizal St means cost benefit analysco financeo to be -incuwed for the Juture prgjech. with veapect bo the 1) Economic Analysis The prgjeck in Accessed te wider « anfe J cociely ond counties economy.8) Social fecnitl ws rail] He = accept the projeck._ the py the soci ety benedik ‘4 d Envisonmental impact anol yaie CEIAY Wil) he project benefit the environment { aor pollute the environment. She ienpack has to be Jesged S enbevia yough eahimates all the ; studies ore Néle~ Sf. o are. acceded — *V% theo gerther det cawied out fev project Fe epmeny id tobe rough ahudy gee vepok ge" pajet idea = suspended So Deveoprnent = @e® “? ow J Pagject A Typteel project rae ray Fave faieeing 2 phases - D> Pre Gnveakmant PI jy ie velated ee authovigabon “6h evestinent decision idee, St tovelven 49 sHOge ~ do & paved OPS" a) sour fie | yelevant pre idea. by Pralierinary filrvahion. o| project idea through geo bib ahad y . ©) Detaled feoaibility abudy. 4) Finel evaluahion and decksion. aveatment Phase. . and actual irae mentakon, 2) Snugstment gy vavebes detailed daz? ahages - Thin phase nvelve> owing 4 f glowing le @0-920 08008 6 e @ e é 6 e e ® e e oO ¢ Q G ¢ 6a Negotating and conkactng . b) Project deaign and engine c) exeestion ond conbel. a) eos and opkmigahon, 3) Past investment Phaoe, — ; H iw post cotnmmiationing phaoe shen project we rennin dos oulputs ov benef ks : Pre Sevestmenk Phone. — # Sediffcalion devant pry g idea — . A company | inveater | orgenigeton would like fe explore progiteble opportunities cithey by expanding the ead hi Such ahidt eo markel OY by exeakin ‘ tay be caniad out “considesing te fstowing Hhven pavameters- yA ave are cophica erea. 2) Shidy 4 economy ot Various aggmenta ao new market. oe eerereee @ OO20DOS 6 OMDB 0 Aources { 3 use 4 Yenewable and nen Yenewable o : Sdenkfication S| =a new pyc 8 complex aihiakion. Oa jaws cvefel” Ady the fallouicg- “iy Pex fovmanes 4. eusting — indus ii) Aval obi si you “material. ww) Export im pork aceneno mW) Price fends: VY Research » vesulls - VO Government nelieies | OTN ORR OO _ ss Pe ject ideo / Concephaligabion -ww) Data available mn various §— JOUR d + va vind Study . goed and “economic bends» op Shady § ick usihe: ay Pre deasibil = . Ajter_ the identification alage the pret idean ave. flere Hough pre Jossitilily abady: Qn Phin’ haga NE elaborated shady we vequived than the previous aban. gL w can intermediate ahege blu conceptalig alien and, feasibility bhadi oo The phase | skege fesaitili'y shady a) prject. tie hs this lage. one accepked w vejeched. detailed deoritility obey ia vecorornended wheq , techne economic ene consuming and wahold nek fake. ove than 3 ghould be able te decide coatly. For 0 rmonths- ajter a) Whether the pr) et w vequive? more 5) Whethey projet 2 Some, —_ 5 the projects need Feat iledtathna Senet 4 pref feosibili ity ahedy is unable detailed i mepied. Feahy ably 99 Hh feasibility financial feasibility sosal feasibility, Tnvirrmente] “5 previous ohege bo re wt geootlity # anal wie 4 economic (hy a prec daciaion - then marker demand. empoct onalysio ‘and qa tris ot eqe Her mae repseeue and detoiled and exstonding 4 + he prgject aped al Inveakig aljon. et 2068698000800 8000890080 ee |@ © ©020D 0 0 OONDO 6 ODOM 6 (IO LON OF ¢ CSOOTRO Note — uavally elie Geestilily ahedy final act decison about the pues bead PC a be a5 even 4 feasibly hoo covered al} aspects ~ then alto iF mas yapul jn @ wrong or incowect decision. Y - Project andl ysis i» based on inadequale dala. Data “wo unrealistic . w) Report ha been debbrotely failed acceplance criterto WW) Unknown or unpredictable gechy ocerred. 5H Technical Feasibiliky Studieo CTechrical anel a) Technolog wpect differest from, commertial Jinancial and managenal supe : Gn this cave the Fechole prjeck , fuel engine based projects which may nears constraint fev a locakion, “The technology deleckon % influenced by apecificalion i work, lide and Fenure G wok, adaphtitily ond aimplisty oath rnvelvad, maintenanes » ovailabilit aafety consideration, operation and 4} spore pars, availability | gee ond duel aerrly- aclection % influenced — by locahion and location decision locabion e6dt index to Teche aight. Used. at locaben Cost of Projeckn A ¥I00 Leatd As coat of Prsjech ob locakion + The [ocah'on prefered wo Hhok which = han Lb CE" aclecked is Legs power bao+ Marker and _demond Prakasa 4 plaonie and | decision geo vequved fo meet There ave markel = make demand 9 For Ahort fern plannirs » fd specific © eas than L qeard-dote yequived shems and Vhey demands only. . . oo b) For” medium tem placnig Cla te 4 geo? > The -data vequired is egake damand Lechnole: and dite detection. “ord 4 a) ) For eng berm pleoning dala & andlagea The markel: CM years or tow mech ammount and dean bread & + Fove coating ws the ability bo use ony previous dake & Fore casting we vacords $00 eabirnate happesingt Fe gebore. “y Cbona For geod ener Lg} ahould hove + Blowatitty Cit ahould be + 3k ahould + Time eaving” + 3 ahould be flenible - «Durable 2 Qaer friendly « aecurae: comsistent) be economical 3 poesitili Hes den analysig the more) ~ Broader. consed | ©899202400999800090090080 AMC LOO rroArr eee“OO @ OO mR ( C 00D 6 opens 2S won 6 Steps uted in Demend Fore cash — I) Determine the use af orecaal 1) Select the item 40 be forecasted ) Determine the. Hme Period [ cok | vevenue { fe Wy) Select fercasting mode] or method, VY) collect the velevant data, VD Make govecak Geom the same data, MS To implement proper veaulbe. # Methods _¢| demand _Fove casing — * 0. Qualifalive method _, e cao} 9 Calecive opinion auwey method or cole od BS% comp odihe. method — St in based on markek survey Ge; opinion 4 people tovolved in marketing and dales. This method doves the basic 6] markek onclysis and demand dereaahing. Although ih 2 aimple ,diveck and Most acceptable but if suffers rom fe dpllowing Weaknesser. + ay HF difficult to conduck at national _ fevel. *b) Theve mi be eroy or tack ¢ Accuracy > §9) There may be” lock of experercs in sales person, WV The estimates ave bared on Personal pedgemenk hence they & may be biased. —— wee Noe “This methed — om be used gor long tern dovecash stor new Priects ond in meme Cases extabn VIprojects alee. . 6 - g) Consumer_survey enetted {customer inherkion tabi’ Gk ve based on what consumer jalense fo bugs SF by personel eontack oY proted queshionanie gan be, done bulk sas This method we prefered when Jn this cave” ee people may” b= contacked — from that jnaflohen because dlemand 4 all people rom Hat jnabittion will be reflected Horough amall Joep |. “people: BD» DELPHT Technique — Sk eo peep proeeah experts - The pannel many ov induaby experts: Jn thus Thin tb baved on— by e@emails bo from institutions ond industry which boned 09 panne) 4 indudes ordinany emplo eas methed — Consensen aon al] members & aimed. » Panel aging economic DY Cond voting ample suet: Dy Cord uring _opision pelle the above crikeria demand forecast conditions Bored on th co ae bane olloesi Abeps — on th 00) 4 § o "4 Tg ) Coordinotoy —serda out am qucttonamie io woviki Tyo oll Fe apart in He pannel: to reply theiy biel prediehon. \) The baker prediction 6 expert are collected, edited and .aummarnyod by the ceordinaksr, whe are Yequsshed Anan . - cCCC@@SSeSROCKOORDCBRaAt00N902a0wy Based on summa “cosrdinabey designs a naw ep questions and giver again. fo" the “experts whe amwer back again. 1 Coordinaboy repeat Me process “J collecting 5 edtne and — aummaniaia 4G vy) Step and q ave repeabed ~ unl] consenaud io veleared. . Ys Tany__of Execution method —» (Nominal group Fechrique e Sk & improvement over delphi method. : in experts is dorrned be inbeveck t A pannel the dug geshons io dercending order and discuss alll © per fillowing poceduren: — . . D Experts ik avund a teble and ore allowed to lobevact with each ther 1) Fadlitate handsevey copies S| queakonantie neaded fo forecast. and each expert expected fo urile ideas aboul queshonawie. wy After every one hee given theiy ideas qacilibaky permits to dhove thelr idean on lip board, ° ov. display board” which everyone can dee: Ww Experts gee ideas ins yokokon unkil all 4 the CODD @ ©0068 @ 6 ©0203 D 5 OMODDSO J expert have given Fhav ideo “TH this phase no discussion has token ploce Usually is be 26 tdeas C ire he emaged y Sn tho’ atep experts discuss theiy ideaa and fecitbaterdio to combine Bimifior idenay Thus 9% Aj ieee ne oe apes ove oneal ) Adter Leh dia euaslone > After mn) re ideo with pithy fe gee anlelsg bo the FP # Quonfelve te tele = ese fool Fool analy Yhe 4 quanhly: Theve Ore hao ) Tiené_Seviea, Medel — Under {hie model Phe demond i> excl apaced ea) deka appwach, “This i obleined ss adi 4 y iwdevvala The pak collected exact demond 5 the markeh in berms models in quanbalive gerecartig - jn berms numer Oh servin: veaponse’ ot ¥ deta ave used for peers doe dorccrh co y) Capual model — jk uw 4 mothemaliee! bechnique bes vee easion aralyata. w used te velote demand and pies Hovough Vineav equations - Metheds under Quontalive AL woach — ) Simple Pryeva: method —> ctrts te also. known ao “nieve” appreech. montha - pao dobe q atleaok 12 Simgle average io om & demacd ah petieda fo past etd ve perods: gk baved on divid. b hae cam gj donand_ opel 0 oo Simple ov. method = r Tota) no: 4 paved: ©2099 08200083 0 02 0.0-900008 aed oO19 2» Moving average. method because the old and QL o> beher than ‘dimple. average data ws discarded. and the trend 4 most recent sum 6 demand s| chosen period Lubichiavear Ne 4 choaan periods - obsdete dela w wed: “ oving ee el average _metted — which improved over moving ov" method in 4 data. io geen de important and valuable Wy = WyDi + WW Oa* WgD3t ~~ 7 vot a WyDo Weights 2 Wy We, - — Wo De, - 2 Dn Demands = Pr5 Hot it ollows te “This method hao the advanto compenaote fo n09- trends ov Aedisonaitty by ding appropriate, coeffi den} Y) Exponential amosthing method — / aR method hea become poplar due te aofhoare jntevvakion, OF % different fem weighed * av. melhed --- OOD 6 OG0°0DS 6 C07HNS 8 P0eWD GB eviod ) Sg Be omy fami mage Bere P c ele + Al) the above metheds ave veclied 02 cholkel G methods: Other than above there are” ether methods knoe G on avbsidiayy methods - § \) Dovble exponential amoothing methed - 3} Eéonomie models oy . 8) bad = used metheds“bjuo deve caokes 20 «) leading inte ober method: 5) Chain vabio telhed: ia C Sf & used to velate dependent » Regression only variable with in ependent variable) Demand ecanine = Forecasting ency be definad an the Norrehe. differences J demand ond dehvel demand. The ever with + Evers 19 om. impact gn the economic apraiael of he project There can be 8 type 4) anova in demand goveeaok ~ toks plece )) Measurement and doka errs > Errors which due fo numeve value only: by mincelealation « bovia 4 a 2) Mode apecigicalion e mode Ws is wor — Error on the gcd implemertation, S29OO8R8RCOOCRSHAROO®8 olee Props 3) Exteme| Ever ~ nova due to extemal factor ushieh are begond our conbel Known 00 extemal 27°" Fallouing aopects important in the meoouving the. ee ctvenses 4 any method 4 forecootig ow 1) Mean absdlure deviation 7 gt io meanuve of the a foecort envy, withoel eoniedering drt 4} [he 21TOr. G Cee tee aye Agn) MAP % fa oo q sum 4_absclite vie gf fovecak f oll povele a MAD = Tolal ne 4 pewese “ Ydation blo MAP ond Stender! daviahen ( skordord devidrion = 1:25 * smooth mean There » ° where skondard absolute deviationof forecort “Ws ee | accuvates Han MAD and*!shande deviakion will” approch™Fe Jere ee W Bae Sk we leas cornrnanly wood de exer devecast- Jt takes inte account the dit 4 accnunt. Hence Aome J the ewrs algabrie am fellows - Bian = Algebrie_aum 4 Jerecask enor | all periods “Talal ne paioda: ~ Sf Jovecasted value & geet han the achus) ( over eakmobed), hen enmy ill be te and vier= a> Verdor Sp evrevs ave vepectedly ave axe Yep eatedly we Yhen bios will be tye then bias wil) & continously St enya hove a ove valve +Bias can alae be re bias cant, MAD and poth should be gers SF will be deaivable it the methed 4 forecorting. bm tohich MAD co s —_ ond brought nearer, Sf MAD tp ower been bros aubomali cally reduced: Coot Forecast Ewer = hom whether Moke = For a vey acevrele ree © © Hew® 6 6 ©00DO 5 OBENDO 0 Supotert ded thot Fem on | 9 berm ove based 0 forecarts vil Vead be oo comtly afte ond mgrtudy Either envoy Can he crikiciol in some Cores where tn other caper . eno in aged 04 be core wind - lenge emea in gore cath he err ine Jha v Bee: alevries aGalaleake:rt Financiol Fsaoikhy ~ 2 protsd soloed “eve ave 3 mejor soph GJ firorcial 97 to a ped = 'y Balimahon 4 prysch to be comecty askmoted J y Eatimakion 9) P prject operation managing 1 + oe 3) Gahimation rset deed o7 made Hough galowsing hese re re means — 9 Cauihy ¢ capt 4 ee . ~ by) Desk Clean fom feared tosh oo) “he prope aquily oe debt combination . aa : wy Yevenue oenriog capadhy 4 ps} va cok dopends Ufo The eqpily__See oor “not obtvack 94 inher and "1 beck ae The debl. gpa wo cot ( folal cork pajerh hos cosk © goat related to operation. DOO. 288 @282000909 000000090080 needed , te be aid capuived fo be, pod with jakeresk Renee fhe YAUORUA earring capes! with debt 4 the pee atheuld & suffices enougr be reo vepaginenh 4 debl. with Jobeveat Sn addiKion bo tho payer abould also ean : afiyerne fo mest cost a equity capt « noel ppp vaisel | cubena used Jo. ud ‘ a Methodo Finer salecton sown opportu her — eatroest gy Accesuncking Dd Average Rate 4 got) > The & an robe § investment a APE Rehan on invACCT TO oeeencovoserrvecseone CoCr es accounting method and their ave several dafi®aton and germ oa +o compute ARR Buf most commonly used w Av. annual profit olter feces _cNet profity The prjeck Tye : ARR = Ay. investment ovey pu. Gnvzstment over the project We = bem sw] 4 sw ree cre = Geile) cost copital vag unements WeR [orkin ~ sv 7 Salvage value Wheve Selvage value meant book value te psje afrer usedel WYe- Udorking capital Yepresents spevaling liquidity available. de the projet and ee by . WeeR = CAT CL asets. ca > coment cL cament Nebibly Noke > “The above forrnule io mosk widely wed be other formulan ave also in prachce- A of annual profit afer x29 x 150 Av. book value 9 investment Where av book value = Ynjkiel evek depreciali on cand this formule. hao te be applied qer a}her { geo and then av. in Caleudated.) |ORK = 100 — Toba} iniHal investment cost Q. There 9xe “2 machinea A and 8 both hove initia) porchane price of 60,050 wpesr: Caleulehe Aar SF gory progit after dapr dialion and faxes yen below - Ger Pe? = pede After Taos € Year Machine A Machine 8"| ' Yooo [2000 2 S000 2 Feeo 3 000 eae : 4 qoo0o se0°e s 12.000 BOO Sve Booo- “To00 Workin: capital fer both machined =o 5 Used lif ss yoove fe both - gio Aw annual profit gh * mee Av annual preg i eS YOO 4 peje’ Av. §pveatment over pe cre — evJ 7 sv tek -l Ae 4 / = o— gooo] + go0o + 0 24 [ecco ] - = 30, $0? ARRYa ny = 23497 ARG fo Bz 2420% wt We should purchase mic 8. —~ os . c [1900200800020 80 8900000OO Peeeeeeccoveccceeee Arner CeCe cCC nS 2) Payback Period Method —- (PS) 25 se Ghis badihinal—mel \ hed wid evaluohon . sy we deo peed + ‘ . . Je in @ meaoure t9 emma which will Hoke eee the cost tovestment, tn berm J Fie. offer fox CCFAT) ex annum 4 9F cach ‘flocs in all periods) then Jelloieg Joule Uridorms cequel will be used. | PB = 3aticl Javeat ment o Coakant annual Cork Anflow 052° £34 is Smpovtont Jo. everg foves ye Kno how ond cohen he wall be geting os hia tow ack ia _naprdanifowen ov Ren. EVES per 4 Bf cash inflows after Jaw : onrure they payeeck pored nf Reripoted by tha fAlowsing formal oo + ng Re lea apes eye curamnch RQBrrested caoh glow) in yeora Ihe alive cach outflow Cc oe B- Qvale value cummelobive cash ovkgles C Nek tavested caeh flow) of the end 5} paved A) cz Ca inflow during the peied after paiod A Neke -© Except fre project i ihe poybods period in leas than the bergeted pogbaek paved. @* hes ar 2 projec then choose Fhak one which ap leaok payback peed: --OH Iigse cory se planning fe sungertake a profect Feuiding @ Jnvealmen} | = Jose Crs The prject to - expected atl e generate -a conthonk cosh inflow after Fox $98.20 Per annum . " wthe next 7 gears Caleulake the pay beck period. si? pp HE = 42 yemw. 2A ‘company to ploning bo take a prject trak vequires leita! tevest E50 Gr and is expedhed. “ip generate cash inflaas after tee per annum a? er ny Year F GRAT CRS Cx) 2 eS — 13 x & us =2) 21-16s I — 3 y iO weigec8 FO s & pe = 90 20 . So As 8 eoxgee iV? Be i c= 1Kerve 8 Ate S e8 hi - ams . Saag < 3°S1 gers’ OCOCOC@C CCC CORO OC DODLOO® |VCONH D © O©CO0O®@ 6 €HHOVWD 9 6 OOODDO PE CIT PLAIN 27 a Advanta ayback period methed — © Calesleligns sj Yee methad ave easy and aime @ HF can be used fo meaoure vigk in a projec ® For companies geeing liguicity problem his methed provides ‘Parking 4 projec which would 7 “velurn money cay. : 4 Disadvartdges — loke tole the accounkejme value” yemove this dvouwbealt)~ discounted be. used. . > © St does nok money. “Te cashflow tech niques can © Gt does nat toke inte accoyi@O)Me cosh flow Hak oceuys after paybeck pored: 5 x! Caohf low he ue —= CDF) Dyed evaluation do nek take into from Phe entive Ife of the payer ider the Hee Value J meng: “adn bechsngu Prossed below, a discounh ochx & for time value 4 meni & andysie ¢ used GX use the Joie fre cash flow prjectens ond digcoucls jo the present vdue eahimabes- Dia counted a Traditional methods Gecount the fotal be and “they do them +o convert oF) Cfo CFs Fa cre » Cfo pS 4 --- + o (+¥)! (ay) cay Gy" = fubive caah plow Coffey tax) Where CF yr discounted vole noe no 4 periods 4 lye“The mon yecleved tod ~3f discounted cash dlow > NPY then 2 + oof28 should be prefered i) Nek Presenk Value ¢NPY) vo worth move than the Aum veceved in qehne becouse jf hao fme value. Sk ie dve fo He fellowting veaoons = 5 1) Ankereak ov cost finance . ) Smpect 4 inflation. 3) Extemal doctor ubsch have an effe boon pak bon Ry Nev computes the present yalue. we cach fing lows “adtey bens tin each 4 the dele Oy ace gears by oR: aubbrackiog the them auikobly- and djacounka cash outflow in thot peiiod: = oxQyet value Cah Saflew eter tox Net present value = py 4 each Outflow Centre iavgahnenk cosh) WP f Sokerpretalion of Soest a gt Npv>° ae project io diner cially viable uipy I then projec lo Ginrcally viable. BeR =| Ik mests breakeven peick BeR 2) then pyjeck ia nanviable Nece CNet benefik cost Ralio) op Necee BRA gS Grtevprelation gj vesvlhe we "gt weer 20 Viable 8 NeCR =O Sndigjerert aily neck <0 Non vid Svs 4 The qubare aud eo aah ‘oflas ofter be value tip ae Jorma fax can be converted in Fe ee Oo a OOOO os DO CHERME SC RENDNIe GeNms = ck IHD” = CFR OF & ore ue ~ G ue O pv = Present value Oo oF? Discoarhng fader . . _. © fw t , ~ .& dalial invedhratC cash oubfiow) by compan flow after fan bo r eck and ne pd 29,00 OE the cost on CPt the NPV 4 the psjee Sol? peF = Gs oa S for 1¢F yeor ef pie a Def = Tig 9 oy = Gor ener? et \ x Bo, 00% NO 03 BD peg? _! Crr009) . a 1 x1 29,00° > [ay esfs = axes 3 (we03) 1 10,000 PN. a 3 (ose + DEF, = arses) 4 [rores)" Oy oe a a F 2,588 ; in a ‘was fa) Cintevesk Saal a cates 394-S & yojool > _¢ cu0s2.8 ooeocac ® 029900000000 7 oe LEC ROoCaA a aQE CCODD 6 €H00D DB 5 ©BwWeDD 6 1S v¢ ‘ ¢ 0 « « 4 2 < i - —_* Creay 49,005 = 9509, 6 3 DER = ! Ut 0 P\c = —L_. x 20,000 = 129986 G0, 000 [, 20, 000 Jo, 000 U0, 000 20, 000 2,69,784 — 2,50, 000 neve 19.784 a NPV >°o 3 financially viable. ® Internal Rake Reluyn — CreR] ' * iy also Known a9 yield on investment - melhod. nal efficiency 4 capital method 4 «wed medi g rehvn method. 4 Rake 4 yeturn method. 4 Economic vote 4 yelurn method. * This method takes inte account the Hme value of money by diacounkia Inflow ord cash ouldlow. The Fem fofernal “Beas” watt the. celeslakion docs nok incorporate environerental / axe feanal gacters such asinfeveak vy ean Inflation: Inkerest rake ma: ce considered ad internal cher alo: Due te dae feakive [hin method la alse known: an dy acounted Coohflew rate“ yelurn rmathed OF effective inkerest method. wake a Deginokions _ of zee yithe ERR 4 an tevedtment OF pre vate 4 yeluwn hot meant NOY =O gk hich: he preses vdue ote the inital investment. achieves * cb in the ducourted vate Q gh the Aiscounked 4 oll juttre cash flow in egy ieee ukich the investment 3 break even point: a. tra fon jew est ener which the NPY 4 cosk (cash oulflow ~ the jnveskment = Nek ay Chovecteralics_q “288 - TaR wv” used fev capits) budgelin) and fo compere the profitesllty of the inventmenk: ~ Greater TRA? deairable and prick Ahold be underteker ~ Rate | velvm Or jnkevask vate: only eahen FRR 7 kel) cost CF a pan. indicalor of effideng oo NPY & the vate at +b te the discounted wote ak caoh Infor) present value xake o gee “mead \ value 4 magn © tee can also be used #09 w& viable eithe- theron new pect | prodeh a LV eaLan oi Ahne pojetr » wigble: gj the banaphe: Vecccsscccccccees ~SOOCCA oe0@ vw,"TRR con Glo be used by evaluate” b8} beck acheme. z + Some companies get better zee b buying Pheienm- 6wn hares and products: inskeod inva "4 ab other plece- o hhen CE, = Cash Jlow after tan de nth we Y= RR Ns hota) usefil Ie or period Q Find IRR for Fre dato chown below Yeon cr ° +} -123,400 |, o “| 7 | 436,200 2 +54, 800 + YB, 100 > " - ygloo eto) Sol 36 209 4 Sy 890 4 oe (23,490 5 (+0 ce) : Loo = L 23, 4ooltt) (ey WG 209) + tay. SHBee + 4 ¥> 00596 = IRR ye S967 = 7RR 1 VO OE 6 OCOD Se “moran ® 8 @G0ODD O leh tay cm 8 a + UB joo = 1:23, 400% 200 x Sy 800% 8100 223, 36, 1 en ( mm PTC J «The evaluation Broncial Ferme ord general berms used Jor ceciely: 34 ar Economic Plys'o— Economic analyse io done pen the poict 4 View — drem ov aan an 2 while Je Phew counby: in! dene from wider proepective incheding douel * Economie anal ysis projet should | be che deed fer - > St ahovld git into naenal — pricaity.. YY the devdopmertfitah dein He a y St conbibutes t= economy. consumpion J. The benefits from thak project Sot the 4 Beqres YOAOUTCERP 4 that. coun 4 The _prsject hoo bo be avalucted Jor The economic viability alee: $ The focus 4 economic, analyse bo fo evaluate diveck and — indiveck benefits te the dodely | nakion. Hence ib and coak benefit anal yaie do known an Adtial ( scBa) a Sodal_ond Cor, Benefit Prnalysin » The concept SBA evolved dupst, revo’ sageer whe used ince 1844 by doles sceA aa the indi cater gor rocichy developmenh ndwweck benefits bokh ere accounted, Sn SCBA direct and ae and hor Brmeng the dave ping coushion dndia 0 pioneey the moat used ik one + | di coker & prgjeck oualuation apecidly 19 puble Becky prjects _and geen yojecks * a aman abyechve | 4 ye imvadting 19 a neo projeck » ino porter v an individed! » dim or 2 MPS fe manimnigs relyrns and a 7 Cc a OL 2 OO aa @829Q20008 8 02060-00090 08CO @ ©MDOL0®@ @ 8 O00 O 9 9 BoHDS cern + There, mou be hoo efits where soda) “benafils ove. feast impor-ant.35 promoters commeicial.. “profitability + The mindset aechoy commercial velums may nek be ¢ wherean ie public lqvourible bak projects ane undertaken Je avcial_ienplieabiy CHhat benefit the society) - eg; Public projects auch oF projects eke Fev auch projects yoads, yailays, power aodal economle analyse » eo of seveskmant | cook ie tevelved benefits bre aod chy bub benefits vequived 5 cosk — Cok Hhak divectly » Divect thor io nek visible ) Ondiveck coak the aodehy . 7g 4 The socal coat gecount the veo! coat, the benefits ave considared for commercial profitability also Whereas indivech cok and —indivect benefits ove ge coded benefits. St means nation beara indivect cok and people 4 the notion “14 4 Objectives of SCBA . 5 ve ck tolttcanory of the nation Look benafit andlysia tokes into the diveck coat ond diveck indiveck benefits a a Corkibukion of the pj Cchonel jneome / GDP) ee +g Contibulion 4 the the _benegits be wojyeck to improve posy aecHon oodel ond fo Feduen vegional innbalance in growth a devdopmnent- & Tuslificalion s| vse scares vesourea in the projech. # Contabution the envivanment the prjeck in probeding oF lrsproviny36 aa indushial development 4 Metheda § Sc8A ~ ~_Methed ( Uniked nobio @® YNIpS pygonizction) UNIpe gave this approach iy 1960 and tha detailed igia- JF auger Gre abagen idelines weve ae faltows. — y Caleatalion “of ficancial akability | profkebility fe prjer maaouved of markel pmcee : nek beneps Qh per berm » Calenlation 4 preea f phadoo pce dow py cos) value yysued 19 econamic Ncte 7 (deat. vo Ake Shadow pret ‘vo aewice wht he often bP oy bey one ar fo be spend + says the actual value 4 a ged & hen shadow geoqes a dafined bg the value, which hee ds ov service pice does 9° marker yalue nek fived- dor auch yor pron ww used - » Adjustment for impact 5 prjecr om aavings and \nweatmnent- cy nee 4 adjosrovent fo impock 4 pee on income dé bution on menk and demest © pajeatnenk fe impack 4 ere govt for which the goual walues differs from mosikony values Sf the? & oe 29222000008 00009068 Am PPAR #8 ° CC” CAO = an colcro Von Ne1 O O09 8 6 KON D 7 "re VOCMH O S\N a Bl Lifle_& Mires Method CLM Method) —= 7 Tia approcch meaasves cost ard bengfly Io beams. inkernekional prices alse known ao boarder price Whereas unioe method — meaoures coat and benefils. in domeahic prices. The ygument in the avouy using inkenahona) prices is thal tt takes. cave 4 the flverahons in domeshe Currency which helpa in improving bode afideny. LM mabhod has divided the gees i AMlowing paths DLM Ahadow pore Jor haded je’ Goods _ which con poo boundries’ called 07 thoded pods: -- #Foy goods which ave exported the shadow prien \ fayh on board — barin!Fo Alheyveas de imported geo dhadow, price is cre Ccoak inguvance fregh) bavis , LM shadow pri ca fo non hredable, goods Non tradable. qr induce land, eledicly , building, powe aupply, nakusal wesourees excluding labour % Shadow price fer on haded da are In desmnt of Marginal aodal cost’ and orginal aoeial benefits which Ore “eahimoled a} boarder prices: By * asi border Prices & traded and non braded gers belh, He Conversion yates are freeged Cpyyen). dn LM approach do labour Component standorel dogs vole i ued. Gh ia diffieslk ty quantity -h the Geloving equakion te Y i ~SNR gm tapout = c= Le oe 38 (Stondard wwoge Robe) Cl» Addikoral resources devoted ts consumphion t > Consoenphion—e}—eseg.e Soda} value 4 sit f cons eo consumphon 4 age eamey Mm > Moxgind) productivity sf labour: CWhokever addi Honal cost bone “on labour in -alas given effect) # Sintlarition blo Unido _¢ LM Methed a # Caleulakon 4 shadow prices (economic prices) gen gesyp exchange saving ak unakitled labour. 4 Consideration 5 equily * Use 4 dis courting cash glow approach. fe Drfferences_.blw Unido & 1M Methed —> 4 LM. Mathed meaoures cost and benefit and Unido suggest cosh {a iokemabtonel prices C border pri cad) and benefit. ok domestic prices: # LM -meaoures coat and benefsk in berms 4 Un comm hed Aodal income whereas ride method measurea in hermy 5 cosumption. + Undo o vageat oka by thage oral ain 4 ‘ffideny prcer > anviegs and ~tecome dishtbuhon whereas LM methed reiiewa! in fogethev and clea e@eoeo00a wens @ee08 c ee02820e@ AARRRACO ®@ © OOO @ @ © HO DG © OOD oe y 4 SeBA_ in Sndia + (Sodeb and Cost Genefik Arelysin) §n dndia Iclict wae probably” givat dineneel foo will. which inked vend later other financial inahhubons aborted and adopted Lm method. Prsjech Apprabse) division PAD) Wao park § gormal plensiog Commission which has now bean named ao NITI aayeq: he goverment 6 India fellows ecoreniie “analysio and they called if ao profitabiihy analysic - Government cleo gallows modified UM version under uakich the key element 4. profitebilits anal gsi are an) fellows ~ 1D All Aadable units ave valued oF intemaltonal price?’ 2) Non hedable thems like lands welling s power ave Valued at marginal cock. eos , cesses ave \groved in all canes. 3) Taxes dues } inpuks and outputs is Valued ok » Poveign exchange je Apecigied premium: 5) Sede) wa yate ave applied fe enakilled Jebour ard pemialilied labour - ge Ont ff Ormeny in savings we meacured in tupeas rather Hhan in. "4 ofhey currency. a Qodian financial jes thon use the detiowsing cribevia gor coat benefit onalysio — D Economic vate af xehem (ERR) oy Interna) vote ¢] vehun CTRR) 29 explained, earlier 2) Domestic Cee cost [ Price CORP) . 3) Effective vate J prokection ERP)”40 # pap— LORS the domedlic cook Gf manuf echeria a & PRC meacures product an agsest fhe eat of rmporty 4o meanuve fhe cost of import cuba hub or a produck wo pubstrhuted by import theo 2) exch the cok J degra prjeck on domestic Yesourcea yee DRE abtaina f. af prsduchion 4 here will be ening 4 own Yesourced at + By measuring the DRC auch a to Pcaleslake the amount of exchenge €FOREX) obtempt io made vequired Jor cove jor _ oF The Re cor be caleslobed ao detlows~ ~ Aqhue added af Aémedhis priser x ER: aoa added af inhennabiondl PHS? 4 Jobe) rupees He Re. M4 be taken 0 © meonure apend a gave one unit 4 grey cnerency (This defination : i produced ore considered Qq measure 6 ore ie appicatle where qr over seaports -? similarly pRe may be taken ap of total “Tipe? apend fo enn one one gee ont ye pre acts ao om jadical 78 decide production in aritole 6% nef ‘ \eaa thon the exchange, indicates manu dackori ng vote 4 4 foeygr wibhio the counhy 5 oy yw SF ORC then ‘tb wo cuen wy advisable: wy Of oR] bo move thon exchange yate than the ‘enpok phan the indigenouo prdudion. however io Hnandall viable. é 8 oo the aearcihy 4 jem opporterbe ond 4 counhy ~may decide fe prods, and Avelo economic. in we fing Keepin benegit like employment yeaousces. ~The gorerorseah Q wheter manufa cheviog ‘ RRRRO ON AOA OOO 0 © 0 000-090 000000000 - -99SO00C00008000009090090 © 0 OHDOT S O DEHDS and_manvfackive _witbiofhe counky even the ope b wh highev thon brchangs yoke. a eg value added ak demedhc prin per unit gf the prposed produch 2 € S000 and value added ab ‘internation pice per unk §| tuso2%ee , then — the product we € 1,000. (exchange Vale. unviable — + a) Indigenous predudion bo Jinancall b) Domeskic prediction io finarchally wiahle o) Indigenous production in cade economically Viable: . d Sndigenous preducton we Aen economically Miable- Dp Qec we correct Ww bee ae correck my asd ae correct) . wy bee ave comeck Sol? ores S202 x 68 — e0° = YOST < Exchange Robe Domedtic production we viable pre is less than the govex vate domeakic production b financial viable and i} io alse Acocdo econort cally viable. an it would also benefit the dodily a Effective vated Prskection 9k measures the cet prokecton offered te the “domeshe Products The. domestic price 4 o produck efjeded by subsidies, toxep, duber, concessions which ave govevenea by the pe local agancies “Thea, the ceak ‘inpuls which qe inte production are effected by auch The compekk pe va Arent conbels, concedsions and — policien, | | |s| the product Jy the weld markeh 9 revealed -onfff after aonceadion and contvel. Sn the absence 4 canhe| the value added -fo 2 produ ck 4 inkermal prices sill be the came: addition, at domeshe by pice: sonceasions ond at domestic preee on SR there & O74 difh even ind international pre? then ik» Measured — by clue asded at Domestic pvicea — Wve odded oh wow prise im value ERP. @000-00000 ERP = Jaloe added at world prices + Inter pretalion 4 Reaul ls ; ate project OF produd dees "——S Dy Sf ERP =o Sk mean + pres nok enjoy 7G prstechon qrom jakewabional compe hon - rok He project enjoys protectes Qf indicates the value gf RP CTVEERD 3 Sf ear re vm international compe hen~ Higher lg vyepresents ae protection by ar em, find the ERP ae data shown- Cost wy € sso tr Whereas eneak inpy? 4 a it project at domestic price wobid pica STe Ore The saber vesligation in doretie Pic. & 62° cw. and tts daorld prt coe ww 610 gop - Value added ot domestic prices = 6207 SP = E10. Malue added at Anternakend prices = Glo- sto, SF WO = aweate 1s 70 ERP = < = Note «= “The pajec uth igh ERP vequives carefe] ‘J bre prvechon available. agains continua. SF may analyst International compel Hor » ikely re be posible that ERP ww higher becop Fhere Ore subsidies and concessions: Sf in ere qe csithdraws — absidien N@e08200eco0rls OO OO AARACOR io con SOC Ace A a a gi leeuanttiienc. and concession in inpoF then ERP mi come. deus? sand project may Goce iskemabional ~ competion: ; te Risk Analysis # Rik Yefers fo used fo meaouve isk ave vonge, variation, verianes, ser vanes, trea ‘vial onal yiie pl as, impobent rele prone to Aome kind of wicks the variability | the project The Indicators atendard « deviation, coeffi cent absclule devialion ebe- # Sn project Appraisal bees, all the prsjed# ove Though Prove mag. be siesilarly ever. identical: Hanes devevol elements in asiumed value. “Ke prjeck opprsisel fet bio 2 projects bet ne hor prajecks ave pyre contain wa ip based on ~ 4) Project C periodic) each ‘inglauds b) Periodic cach suf fous Call mackines In 2 project) 4 Salvage value 4. machinerg. Note — Risk & dafined oo the vavabilily 4 ment based on certain probability pubcome Whereas uncerkoisity does not involve probatle # Tyges_g] the isk in Be_pigjesh D Projeck completion risk i ‘Sf project nck qe eee P Then if will vesulk fn me over yun approach: completed on ard cost ovarur Hime 2} Resource risk + Voshahion in use. of resources Tike you material, power» ri ahovlage man power dao veaulhy in a wake : 2 Technology isk — St may hi in he. ~ yd appen in bao forma - @ The’ +technde wed lis nt proven é b) Rapid et in fechneleag mekes older bechndlegg yelurn on invest4) Palikica) Risk —> chonges in gov may veavlls in * in ie. type 4 policies sich Chseve implemenked by He exter ge thot 2 alo a wiak, 5} Snbevea vale risk > Qnevease ‘19 abe 4 interest doing long pojects canes a rks 3) Exchange yate risk dD. Price Risk at. Techniques How should we analyge the defined methods ? “The. polloving bechniques Prnalysio Risk Analysio wisk on the basic 4 cerbained can be applied for vek andy ) Sensihivi This analysie te based on the quedtor “hak if" analysis SE sales one vewasksent davickes om ls expecked Volug Hen conducted + sonaihivi anelyss ve The Oe, gee thet how The pyet ve vulnerb- fe, ee Png of Fhe, finansid eck are anal an idee tadicater ike NPY> sae, ARR gf the variability, Due fo change 19 other Gece on ry gny one. vanable of 4 Hme keeping constant, aigjerene can be calenlated. Due b change in tre » calalabed. in NPV OY acid 4 a pt onétook) one variable chan: eg Sf he quantity { other variable yenain ¢ limitations sensihivy analyyie ~ + St nearly shows change jo, Nev, FRR ony other indicatoy grates and no further conclodon. due to change jn Bore - On the anelys sme vevable oF & Hime io changed whereas others are held conskook Sy realy several duck decreases by | % then ney changeo by 6%. onl ee £S9OQ82COBSE © rec002ecee AAR FCOICONS © PP OElLOD © 6 SHODD 0 DQWDID Ceae race BCD =, {o 3) Seleck the value vondomly, y) Determine varicbles can changed. : “5 te The inkexpyetatian yesulh ~in very aubj e Maker may accept the peoject whereas Project. 2) Scenevio Analysis — we, one dediah others ray reek H . # mn this analysis several variables are varied simul baneousk and they effect is obsewad on financial’ indleabors cweu! IRR ete) ——_* we * This melhod Jo improvement over aenaiivily analysie because ik te move vealishe tt Mosk common, “hres scenevida ave considered bedane we have mmol ple variables which are being considered, > oplimiske scenario 2 possimishe scenaio 3 mosk Uikely acenevio 3) Simulation Andis —- CMonte carlo Analysia) ike to know the likeljwoed effect The decision makers would > chon in variables on actual Yeslls. This infownalion can be qenavabed by simulation analysio D Modelling He project > The modelling will yevea) how nev i> veleated fo cthey pavamabers: . . >») Specified value 4 paramebews and probability dishibukion a] exegenous variable cindeperderh. variate dem the probabil hy didhibubior | each exogenous variable NPV comreaponding de vandom|y elected varighle3 Yepeat shep 3 and 4 to obbain large nor ainda fed NPV 6) Plot the frequen dishabubion of NPY: ~Prequency didibukten max be an 4 the Gelessing We le lz “Triangular didhibukion uniform dishibubion fh Ls oocccesseh x 7 ©9882 C009 08 0060000000 Pe a - rAAAnCRe °OG €Hored 3d a 9 8 BoHd@ @ oe CCOm INS Cc oO © * gnnyal maintenance: charg? » 47 WD Breakeven Analyis ~~ fetal coat df production ,.,.avmq Sn this technique the 1) Finad cosk : u) Variable cok The coak Foal, verncinw conslanh iwreipedive cHon known a dine cosh. jand cotk > insuvanee ined omehs, adminishative expenser, Fixed Coat — volume 4 pote eg vent 4 gockoy > Caveat on tong Fe bowowinas, Wieense Jeo 2% > cos wig SR Seed Navichle Coat + “This type 4 prdution. JF divecly Ineveaces Oy creases in a eg cost xa rraterial, oe vpply > eel conaumphion eating expensed, tonfron exp enaos- Total cosk = Fined oe Narigble coat The dales velgee os ad adlion * th 1 GO vei 3 e a Get @Prvaiictle end fe revenue earned dixeHy propor onal te no sold Py AL break even poink cme progiky No leas Lage dales ‘reali igationc total wevenue) is equal bo sm Realigabion cse)e Te ( Ferve) 5 Te = Total cosk Fe 2 Fined cot vee variable coat me”er 8 a coat / ce Sale oar Price, Forel ce ko KX Sed : : ; No yy ere add | Produced — Where 8 = angle 4 inseafes and ik vepresents rate 4 preg ¢ Oe oz increase in profi) s= Salee value Az Fixed cx <> gz varihh Oteat ~ No = Breakteven no gf uriks . Ata: Tokd coat X, = losses xy = Progth My Breokeve9 poink Lota cosh curve in Whe inkersection point af veverse Nine and At Breakewen ne profi no [oss = pijualive * @ : .\POSCHOCOOO®A0009000 APRRRRRACNR - soenca~ # lek No Ww nor i uns produced ab . BE. if". units produced ove leas “than break eyen numbay MDs then the prjet will be in fades Ny < No loasen = Teta) doles ~ Toba) eoak x, = So CA)t 8) = Ve. a Of feted production io greater then te project to in profit & Ny 7 No rb Profit = Tahal salen - Tekelt ; Sac CAar 82) than bredk even nuberCn: % = ve & # The difference ble EE pede and — break even produchon i cated Pt, margin. Profit “SS Pi, one » jt ow defined ap the difference Phe Il O © OOOO @ © OOlOD © 0 ©HOWDO @) 4 Conti : Q ales 1eRtiation, and variable coe wee © conbibulion = Salee value ~ Veroble cost c “the excess of ailing price over variable coat (eas &—— conkibublon conhibubs dowerde— | t. © Fixed cosh QP @® Profit - | | SRR mea. af ellins price pes anik a o prodock in & 12, 0 \ls variable | cost io FE. Then conbibution will be and ansume thah fixed cost Ss vupees per unify “lets eso, 000 and - breakeven poiak has been achieved. ss galt Ng = eae cost Contibukion eo no ak BeP, = peep ine) = fixed cosk Gres realign “Ver oble PN on Etxed cook <== Conbibulion fev anit os = So Total sales valve ak Break x umber “og = Nox coe per usik ‘eck Q The derails 4 re SF cat and revenue d a Py gre. nied Ne F 65000 FOE € 24,000 sales coat aca ) Pind beh! fo anita. en no aris econ] fo obtain a profit gf yy Nes of unio fo be produ E 20,000 er @ ver TOTS F Gs,000~ 782900 ~~ =F Yo, 000 E BO, 000 Sales realig oben = 25,900 ~ 800 Ls (aseesy TQoooey_yaeoe Sood ; OLGA 1©9 98220089 © 260-0.0290006 ©Go-0@ @ 6 OW0DS O cas an ee BCTOO Cm ORO | Stepan dea © Sales rate gy t unt > € lo ak wep Fixed cosh Cont bubion BEP= Conbibution > 20000 + 28000 = 4S/o0D Profit = Total Revenue — Teta) cost 2e090 = 10% — (2Se00 + sx) X = 9000 Ae a } [5] Decision Tree Anclysis > * © ' Gp in assumed that the project wil completed in -aecor danca with the proposed plansing uPy! vvedlihy there to cloays home flewbilihy “tn- execution, HERB? auch fledblily “eels in ? : ~implementation then decision be analaie we a uaedel tool Io ovalyging and cnslugligh prsject fact _flostitly Penh Fl p be shedued’ Ydak hence, geo) Besson Fee analysis can wed fr wk © \ Vige analysio ) Senkigy AAPeblem and alternabive .anplisn: 2): Deine: Pre decision teoar> Make the path + detision aitsation and ‘represent He inshuckon ie diagrarok cal for ; 3) Specify the probability and oon ben Peleornes u) Evoluate variews decision alternative 4 € imple ment Khe bedt decision where ever Yequived .# Kiale tak_management - ae = 82 d Change Pricing Stra gt A leunoy sellin ica ineveanes tha demand heweve x YE will * the break even unis. » Sequential Snvaotrnent . Gnikially start with — slow) mall units producton with amalley Investment and gererally 1 ae demand t 3) Provide Good Inmuvanen Cover — . Sn implementehon J & prsjeck there is}, suse mollipla yesources: hence ib necenerg S2" keep Inte account ‘nsuvanen for v valuable ree 4) Senprovi n Information — Caather in Joenation qbout > ed a healed methel. market and technologies and use \ S) Finandol leverage Ty fo vedues "sais debt “and equity 6) Risk Reduch bes “ change open fined coak and variable — coAt ba procuing dome spor svhside # Detaled Pag” Report ~ DPR io aNdelailed and elaborated plan for @ project Ushich indicake the overall plan, different les wedour cea Neaded ge aucema of the prject: - DPR w O foal detailed appraisal ora blueprint for Me next ahoge. ~ 2.08 © 00800800 0 0000-0 f O-8 0D SS nnnETInnnnennnenereemeee a a@ ©6000 6 OD0D0N 09 B90NODD 9 € ne RE CC VMECO CON GW 53 + Blemonkx of ork Es @ Maikt Planning = ‘emnond — for ears compar ative doseriphion , var ting aheaterg “ St includes prmery and secondary data dourvery and product moket potheve ® Equlpment and_prace After imarkeling planning daai Sn. thio Oko meteial © Glow» wendey in dormelion, inp a ave. mentione and ovtpeb operation and custorner ew “Thre phase helps io chsier bechnal td technolegy cell abovation . : So . @ location of Project — pa musk consider the material, power franamigatgig aloraye ten bias ® lagout of the Proj ae . ; laqyook be Ee on roi ard + at ery effician ey & project Mates} Yo, the Project zahmole fofa) maberal per should pees an requinred ia O peje © Specification of olan _plan an Equipment = per should — previde “bechsieol Apecifications {e technology Gnd machinery « @ ELA I envinenvndel Smpack* association) = vs “veqpived: odlikier ofion oY to sopply ¥ yao aad mertalig oppor DPR should waded EIA Wy order to meet environmebe,dbandardo: ® Information _¢f - “epevalion = The _dhould include plont capacity , yesour > management » y endouy monggements gall operation and moinkenance — cosh, asfely concern , mange- monk Infermation aqplen: » Commer cial | Aapeck — per. should incdude 3, should compete profitaviity iaphuee: managements ~ contro ctual velahonship likkely to ocean: » Finan cal Aapect DPR should wtndude coft: which may pecans Qk may include details obo Nand prsjectid balance oy B Socio Economic day ek O gt wm easenfial to make on effort ok the final atege oy, le. and 0 dushainable approach to _ prvide 400 vk abveule legs an Je community yeadpy 2Qe hospital ‘and water - aupply planning. expected vcngn bod projected ‘in prjeck . aprefit and lous shabese developments _ COD KR A AOOO FE AOO0 #0 000000900000006 OO OD, en co -¢ mS ar