Entrepreneurship & Project

Development (FIN – 4104)

Roushanara Islam, Assistant Professor, Department of Finance, JnU

 Text: Projects, Planning, Analysis, Selection, Financing,
Implementation, and Review by Prasanna Chandra, 7th edition
Introduction

3
 • Project management is the discipline
of planning, organizing, securing, and
managing resources to achieve specific
goals.
Project
Management • PM is the application of knowledge,
skills, tools and techniques to project
activities in order to meet or exceed
stakeholder needs and expectations
from a project.

4
 The primary challenge of project
management is to achieve all of the
project goals and objectives while
honoring the preconceived constraints.
Typical constraints are scope, time, and
budget.

Project Management…
Challenges
The secondary—and more ambitious—
challenge is to optimize the allocation
and integrate the inputs necessary to
meet pre-defined objectives.

5
Forces Fostering Project Management

PM has emerged because of the characteristics of

contemporary society demand the development of new
methods of management. The three paramount forces are
–
1. Exponential expansion of human knowledge
2. Global demand for goods and services
3. Global competition

6
What is a Project?
PMI Definition
“A temporary endeavor undertaken to create a unique product or
service”
Source: A Guide to the Project Management Body of Knowledge, Project Management Institute Standards
Committee, p. 167, 1996

• A project is a specific, finite task to be accomplished.

7
Key Facets of Projects Analysis

8
References:
Chandra, P. (2011) ‘Projects, Planning, Analysis, Selection, Financing,
Implementation, and Review’ 7th edn, Tata McGraw-Hill Publishing
Company Limited.
Meredith, J. R. and Jr. Mentel, S. J (2011) ‘ Project Management: A
Managerial Approach’ 7th edn, Jhon Wiley & Sons, Inc.

9
Financial Estimates and
Projections
Chapter- 6
 Financial Estimates and Projections
6.1: Cost of Project – sum of the outlays on the following:
 Land and site development
 Buildings and civil works
 Plant and machinery
 Technical know-how and engineering fees
 Expenses on foreign technicians and training of technicians abroad
 Miscellaneous fixed assets
 Preliminary and capital issue expenses
 Pre-operative expenses
 Margin money for working capital
 Initial cash losses
11
Financial Estimates and Projections
6.2: Means of Finance –
 Share Capital
 Term Loan
 Debenture capital
 Deferred credit
 Incentive sources
 Miscellaneous sources

12
Continued…..
6.3: Estimates of Sales and production
6.4: Cost of Production – major components are
 Material Cost
 Utilities Cost
 Labour Cost
 Factory Overhead cost

13
Continued….
6.5: Working Capital Requirement and its Financing
6.6: Profitability projections
6.7: Projected cash flow statement
6.8: Multi-year projections

14
Illustration (Page – 6.16)

15
Illustration..

16
Projected Cash Flow Statement

17
Projected Balance Sheet

18
• For financial appraisal-
 Time value of Money
 Investment criteria/capital budgeting techniques
 Project cash Flows
 The Cost of Capital
 Project Risk Analysis

19
Reference:
Chandra, P. (2011) ‘Projects, Planning, Analysis, Selection, Financing,
Implementation, and Review’ 7th edn, Tata McGraw-Hill Publishing
Company Limited.

20
Thank You

21