ENTREPREUNARIAL PROJECT MANAGEMENT
PROJECT 1 or PROJECT 2
Investment : 25,000 Rs
Investment: 35,000 Rs
We have to calculate the cumulative Cash Inflows
Project 1 : We payback the machin after 10 years
Project 2 : 35,000 - 32,000 = 3,000
(3000/4000)x 365 = 274 days
We payback the Machin after 8 years and 274 days
Conclusion : Project 2 is generate more Cash Inflows and he is more profitable then we have to choose this project instead of the project 1
NPV Method for Net present value is used in capital budgeting to analyze the profitability of a projected investment or project.
If the N.P.V is negative, the investment is considering as non profitable if it is positive the investment is considering as profitable
Difficulty to identify the accurate Discount rate
For evaluating their is a very powerful tool it's the ratio !
Ratio analysis is the quantitative analysis of financial informations (level of debt, level of equity,...)from a company financial statement
Debt Equity Ratio = Long Term borrowing/Equity share+Preference Share+Reserve+profit and Loss
You have to make an accurate estimate, no project can be completed within the budget and the target completion date.
The P.E.R.T. (Program Evaluation and Review Technique) which was developed for the U.S. Navy Special Projects Office in 1957 to support the U.S. Navy's Polaris nuclear submarine. project
The best thing about PERT is its ability to integrate the uncertainty in project times estimations into its methodology.
It also makes use of many assumption that can accelerate or delay the project progress.
ESTIMATION BY MANAGING TEAM OF FASTEST, AVERAGE, MAXIMUM TIME COMPLETION
Expected completion time = (fatest + 4 x average + maximum) / 6
Variance = (Maximum - fastest)^2 / 6^2
Standard deviation of the project = Square of the Variance
WHAT IS THE CRITICAL PATH ?
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Public - 9/2/16, 6:24 AM