Professional Documents
Culture Documents
Project Management
Topics
Project Management
Project Cash Flows
The Time Value of Money
Definition & Basics
Investment Criteria
Selection of Site in Various Countries
Cost of Capital
Group Exercise 1
Risk Analysis
5Ms
Qualitative Aspects
Group Exercise 2
Project Financing
Incoterms
Project Implementation
Global Logistics Considerations
Financial Analysis
Capital Allocation and Framework
International Sources of Finance
Group Exercise 3
PBRT/CPM for Monitoring Projects
Generation and Screening of Ideas
Managing International Projects
Group Exercise 3
Software Tools for Project Management
Market and Demand Analysis
Technical Analysis
Financial Analysis
Financial Estimates and Projections
Project Selection
Assessment
Grade Distribution:
Theory Paper : 50 Marks
Assignment 1 : 5 Marks
Assignment 2 : 10 Marks
Class Participation : 10 Marks
Presentation : 20 Marks
Attendance : 5 Marks
What is a Project
Project
Temporary group activity designed to produce a unique design, service
or result. Project Management Institute
Features
Temporary
A beginning an End
Non Routine
A Cross Functional Project Team with special skills.
A Budgetary Constraint
Ex: Bridge Construction, Setting up a Factory
What is Project Management
Project Management
Its the application of knowledge, skills and techniques to execute a
project effectively and efficiently.
Key Terms
Knowledge: Core Competency
Skills: Dexterity
Techniques: Experience
Effectively: Doing the right things
Efficiently: During things the right way
Whats Global??
Global
Not Local
Features
Foreign Exchange
International Law
Transportation & Lead Time
Accounts and Taxation and IFRS
International Banking Facilities
Interest Rate Parity / Impossible Trinity
Culture
Language
Time Zones
Site Selection / Global Logistics
Site Selection
Location of Market
Availability of Raw Materials
Availability of Port
Availability of International Airport
Availability of Skilled Manpower
Financial Implications
Site Selection
Instructions:
Form Groups of 5
Select a Project of your choice:
Select a country/location
Select a Product
Estimate data
Justify your reason for selecting the Location and the project.
Time for Discussion: 10 minutes
Tip 1: Spend 2 minutes on deciding Timelines, Milestones
Tip 2: Divide Work
Time for Presentation: 10 minutes per group
Project Planning Five Ms
Man:
Organization Strength
Hierarchy
Compensation
Accommodation & Facilities
Material
Sources
Rates
Suppliers
Technical Specifications
Quality
Machine
Types
Capacity
Production Rate
Downtime
Maintenance
Cost
Project Planning 5 Ms (contd)
Money
Sources of Finance
Cost of Capital
Breakeven
Guarantees
Risk
Method
Quality Systems
Administration & Discipline
Health & Safety
Milestones & Timelines
Group Exercise 2:
Instructions:
Form Groups of 5
Reselect Previous Project:
Estimate data
Plan the 5 Ms using the above format
Time for Discussion: 20 minutes
Tip 1: Spend 2 minutes on deciding Timelines, Milestones
Tip 2: Divide Work
Time for Presentation: 10 minutes per group
Assignment:
Imposisible Trinity
CAPM
Calculate WACC: rf=10%, Beta of ONGC for last 3 years, Market Premium = 6%,
Equity = 1,62,000/-, Debt = 83,000/-
Cost Sheet
Incoterms
EXW (Ex-Works)
Delivery at Sellers Warehouse/Factory
Responsibility of Buyer for Transport, Freight Forwarding, Insurance
FOB (Free on Board)
Delivery up to port or point of Origin
Buyers Responsibility: Transport, Freight Forwarding, Insurance
CFR (Cost & Freight)
Delivery up to destination port
Buyers Responsibility: Insurance
CIF (Cost Insurance Freight)
Delivery up to destination port
Buyers Responsibility: Pick up the Goods
Global Logistics - Pointers
Key Features
Fundamental Responsibility of Senior Management
One of the toughest challenges to any company.
Strategy at its core
Capital Allocation & Framework
Cost Reduction
Substitutes (Rexene for Leather, Flyash in Concrete)
Vertical Integration (Ultratech Cements)
Productivity Improvement
Business Process Reengineering (Mahindra & Mahindra)
Automation (Saint Gobain)
Capacity Utilization
Product Augmentation (Polo LHS, Vento)
Product Development
Margin Contribution
Allied Products (Tata Salt)
Diversification
Group Exercise 4 (Assignment 1)
Porters 5 Forces
Michael Porter (Competitive
Strategy)
Industry Analysis
SWOT Analysis
Internal & External Analysis
Screening Ideas
Market Size
Shrinking
Saturated
Growing
Govt. Restrictions
Compatibility with Promoter
Risks Involved
Market Analysis
Understanding Competition
Forecasting Demand
Customer Surveys
Obsolescence
Raw Material / Inputs
Plant Capacity
Product Mix
Location
Environment
Cost
Budget Vs Actual
Means of Financing
NPV
IRR
EVA
Problem:
Return 2nd Year: Rs.40,000/-
Company: Return First Year: Rs.10,000/-
Return 3rd Year: Rs.25,000/-
Investment Rs.1,00,000/-
Return 4th Year: Rs.90,000/-
Return First Year: Rs.10,000/-
Whats my NPV for Discount of 12%
Group Exercise - 5
Types of Interest
Simple Interest
Compound Interest
Time Value of Money Important Terms
Interest Rate: Can take multiple connotations ranging from risk free
return, to bank rates, to market rates.
Basic Dividend Model
n
Divit
=S (1 + ke)t
t=1
Where:
Divit: Dividend issued at time t
n: no of periods/years
ke: Discount rate for Equity Holders (Expected Returns)
Basic Dividend Model + FSP Adjustment
Where:
Divit: Dividend issued at time t
n: no of periods/years
ke: Discount rate for Equity Holders (Expected Returns)
FSP: Final Share Price (Share Price of the Stock at period n
Session - 4
Instructions:
Form Groups of 2
Select a Project of your choice
Presume project life of 5 yrs
Estimate data
Plan the 5 Ms using
Plan Implementation & Milestones on Gnatt Charts
Include Proposed Strategy after 3 yrs of operation
Prepare Excel Sheet detailing the cost breakup
Calculate the NPV and IRR for the project
Time for Presentation: 20 minutes per group max
Assignment: Gnatt Chart
IRR, MIRR
NPV
Gearing
Risk Free Rate
Beta
CAPM
Break Even Analysis
Types of Equity
Types of Debt
BCG Matrix, Ansoff Matrix
GNATT Charts