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The National Water Commission in its ambition to drastically improve its water and wastewater services has employed the services of a local consultancy, Endeavour Water Ltd to reduce water wastage and recycle wastewater. The project titled; National Water Enhancement Project (NWEP) has a value of 100 billion dollars.
As the project manager, you have proposed key project phases or control accounts: Strategy Development, Preliminary Planning, Detail Planning, Water Project Execution and Performance Analysis. The major work packages are the preliminary project report; project pay-back period; project performance report; project management plan; project procurement plan; strategy report; and new water /wastewater systems.
Draw a work breakdown structure to organize the control accounts with their respective work packages.
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- AMT, Inc., is considering the purchase of a digital camera for maintenance of design specifications by feeding digital pictures directly into an engineering workstation where computer-aided design files can be superimposed over the digital pictures. Differences between the two images can be noted, and corrections, as appropriate, can then be made by design engineers. Solve, a. You have been asked by management to determine the PW of the EVA of this equipment, assuming the following estimates: capital investment = $345,000; market value at end of year six = $120,000; annual revenues = $120,000; annual expenses = $8,000; equipment life = 6 years; effective income tax rate = 50%; and after-tax MARR = 10% per year. MACRS depreciation will be used with a five-year recovery period. b. Compute the PW of the equipment’s ATCFs. Is youranswer in Part (a) the same as your answer in Part (b)?2) AMT, Inc., is considering the purchase of a digital camera for maintenance of design specifications by feeding digital pictures directly into an engineering workstation where computer-aided design files can be superimposed over the digital pictures. Differences between the two images can be noted, and corrections, as appropriate, can then be made by design engineers. a) You have been asked by management to determine the PW of the EVA of this equipment, assuming the following estimates: capital investment = $345,000; market value at end of year six = $120,000; annual revenues = $120,000; annual expenses $8,000; equipment life 6 years; effective income tax rate 50%; and after-tax MARR = 10% per year. MACRS depreciation will be used with a five-year recovery period. b) Compute the PW of the equipment's ATCFS. Is your answer in Part (a) the same as your answer in Part (b)? 1The Government is considering a multi-purpose river valley project in which would involve construction of a dam, a reservoir, a power house, and several irrigation canals. The project would supply water for irrigation, generate electricity, and provide a measure of protection against floods. The following information has been gathered by the project control board. The project will require the following during the construction stage: i) locally produced power equipment costing Ks 200 million; ii) imported power equipment costing $ 10 million; iii) 20,000 tonnes of steel produced locally and made available to the project at Ks 6000 a tonne; iv) 350,000 tonnes of cement produced locally and made available to the project at Ks 800 a tonne; v) other construction materials (sand, bricks, ballast, etc.) costing Ks 100 million; vi) 25 million man-days of unskilled labour for which the project control board has decided to pay a daily wage rate of Ks 10; and vii) skilled labour costing Ks…
- Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at$400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) Financial Analysis for Project Name Created by: Date: Note: Change the inputs, shown in green below (i.e. interest rate, number of…Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at $400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) What I have so far is attached I need to make it so Pay back occurs in year 3 where there is positive cumulative benefits - costs.Citco Company is considering investing up to $512,000 in a sustainability-enhancing project. Its managers have narrowed their choices to three potential projects. • Project A would redesign the production process to recycle raw materials waste back into the production cycle, saving on direct materials costs and reducing the amount of waste sent to the landfill. Project B would remodel an office building, utilizing solar panels and natural materials to create a more energy-efficient and healthy work environment. Project C would build a new training facility in an underserved community, providing jobs and economic security for the local community. Required: 1. Assuming the cost of capital is 12%, complete the table below by computing the payback period, NPV, profitability index, and internal rate of return. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) 2. Based strictly on the economic analysis, in which project should they invest?…
- Refer to the XYZ Company example in the chapter and the results in Panels A and B of Exhibit 12.7. On the basis of this information, management of the company has decided to delay the implementation of the project for 1 year. Those managers are now interested in knowing how sensitive this decision is with respect to the assumptions they’ve made regarding the basic analysis. Therefore, they have asked you to prepare some supplementary analyses regarding Panel B of Exhibit 12.7. Required: 1. Holding everything else constant, what is the expected NPV of the decision if the probabilities for the three scenarios are as follows: high (20%), medium (47%), and low (33%)? 2. Holding everything else constant, what is the expected NPV of the decision if the probabilities for the three scenarios are as follows: high (24%), medium (43%), and low (33%)? 3. Prepare a 5 × 3 table containing the estimated NPV of the decision to delay for each combination of the following: risk-free rate of interest…Citco Company is considering investing up to $500,000 in a sustainability-enhancing project. Its managers have narrowed their choices to three potential projects. Project A would redesign the production process to recycle raw materials waste back into the production cycle, saving on direct materials costs and reducing the amount of waste sent to the landfill. Project B would remodel an office building, utilizing solar panels and natural materials to create a more energy-efficient and healthy work environment. Project C would build a new training center in an underserved community, providing jobs and economic security for the local community. Required:1. Assuming the cost of capital is 12%, complete the table below by computing the payback period, NPV, profitability index, and internal rate of return. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate…A) Identify and classify the project into Replacement decision,Expansion decision, Diversification decision, Safety and/or environmental projects, Independent Projects, Mutually-exclusive project and Dependent Projects/Contingent Projects: B) Also mention the reasons for the classification. 1. Oman Insurance Company started their new branch in Salalah. 2. Badar Al Sama Hospital entered into a contract with health providers in UAE to open their clinics in UAE. 3. Intertek had two projects, that require initial outlay of RO250,000. Board of Directors decided to accept both projects, as the company had sufficient funds to invest in both projects. 4. Marine Engineering has a budget of $50,000 for expansion projects. If available Projects A and B each cost $40,000 and Project C costs only $40,000. 5. Slice Traders, specialized in selling carbonated juices intends to start their manufacturing units, producing potato chips in Oman. 6. A leading bank in the region intends to add mutual…
- The Chief Operations Officer (COO) of a manufacturing firm recommends one of the manufacturing sites to undergo a process improvement initiative. He claims that this project will enable the company to realize a net savings of at least $3.25 Mln. The Chief Financial Officer (CFO) of the company tasked you to conduct a financial analysis to verify the claims of the COO. After performing cost analysis, you estimated that the project will require an initial investment of $2 Mln today and $1 Mln in Year 1. Afterwards, the initiative will yield an annual cost savings of $850k from Year 2 to Year 10. You assume that these cost savings are realized at the end of each year. (a) Suppose that you use a discount rate of 5%. Will the resulting net savings support the claim of the COO? (b) Determine the Internal Rate of Return (IRR) of the process improvement initiative. (c) Show the NPV profile of the project.Whitehaven Group Ltd (WHG) is an industrial machinery manufacturing company based in Sydney. Due to increased demand for the company’s products the CEO of WHG, Mr John Johnson, is looking at upgrading the company’s production facilities at Chullora. As the member of the finance department at WHG you have been assigned the task of assessing the acceptability of the new project. • To assist you in this task the finance team have prepared the following information relating to the proposed project:• Implementation of the new project would require an immediate outlay of $10,000,000 on new machinery. This machinery is depreciable for tax purposes.• Additionally, WHG would need to undertake an immediate upgrade of the warehouse used for the project. This upgrade would cost $2,500,000 and is not considered depreciable for tax purposes.• The project is expected to have an operational life of four years.• The project is expected to generate EBDIT (in nominal values) of $5,000,000 in the first…AMT, Inc., is considering the purchase of a digital camera for the maintenance of design specifications by feeding digital pictures directly into an engineering workstation where computer-aided design files can be superimposed over the digital pictures. Differences between the tw images can be noted, and corrections, as appropriate, can then be made by design engineers. The capital investment requirement is $345,000 and the estimated market value of the system after a six-year study period is $115,000. Annual revenues attributable to the new camera system will be $120,000, whereas additional annual expenses will be $22,000. You have been asked by management to determine the IRR of this project and to make a recommendation. The corporation’s MARR is 20% per year. Solve first by using linear interpolation and then by using a spreadsheet.
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