StudentShare solutions

Project - Essay Example

Extract of sample Project

After then, Net Present Value (NPV) for the whole project is computed. Financial and non-financial risks factors are discussed while highlight the issues that may hinder the overall progress and benefits attached with this project. Recommendation is the last part of this report in which the discussion is provided which focuses on the acceptance or rejection of this project. 1. Present Value of Cost of Project The cost of building a new facility in the form of electricity generator is compromised on two years cost. The cost of first year is \$25 million whereas the cost for the second year is \$28 million. If the time value of money factor is set aside, the total cost of building such generator is \$53 million. After discounting this cost with the cost of capital of 8%, the present value is found to be \$50.93. The following is the supporting calculations used to compute the present value of building up the generator. Years Cost of Generator   Discount Factor (8%)   Discounted Value of Cost   Present Value of Cost 0 -25 x 1.0000 = -25.00 = -50.93 1 -28 x 0.9259 = -25.93     2. Present Value of After-tax Cash Flows It is expected that after-tax profits earned by selling the electricity would continue over a period of 9 years once the generator facility is built. By leaving out the factor of time value of money, the total profits earned in the form of cash flows from the generator amounts to \$75 million. However, if cash flows pertaining to each year are discounted by the cost of capital of 8%, it decreases the value of \$75 million a lot such that the present value is summed up to barely \$47.16 million. The following is the comprehensive computation, which is used for calculating the present value of sales of electricity. Years After-tax Profits   Discount Factor (8%)   Discounted Cash Flows   Present Value of Cash Flows 2 6 x 0.8573 = 5.14 = 47.16 3 7 x 0.7938 = 5.56   4 8 x 0.7350 = 5.88   5 9 x 0.6806 = 6.13   6 9 x 0.6302 = 5.67   7 9 x 0.5835 = 5.25   8 9 x 0.5403 = 4.86   9 9 x 0.5002 = 4.50   10 9 x 0.4632 = 4.17     3. Net Present Value Net present value computed for the overall project is computed as negative \$3.76. Net present value states the amount, which depicts whether the project provides the excess of cash inflows over the cost of building the generator facility after considering the element of time value of money. Following are the detailed computations for calculating the NPV of the project under consideration: Years Cost of Generator After-tax cash flows Discount Factor (8%) Discounted Cash Flows NPV 0 -25 1.0000 -25.00 -3.76 1 -28 0.9259 -25.93   2 6 0.8573 5.14   3 7 0.7938 5.56   4 8 0.7350 5.88   5 9 0.6806 6.13   6 9 0.6302 5.67   7 9 0.5835 5.25   8 9 0.5403 4.86   9 9 0.5002 4.50   10   9 0.4632 4.17   4. Risks The project of building up a new generator facility, which is expected to work for the next ten years bring several risk factors. These factors can be split into two major categories namely as financial and non-financial factors. Financial risk factors are given below followed by the non-financial factors. Financial Factors a) Cost of Capital One of the most important risk factors associated with such financial projections is the estimating the most appropriate cost of capital, which is used as discount factor to discount the cash flows and initial investment in order to compute the present values. It is extremely subjective to estimate the cost of capit ...Show more
Cite this document
• APA
• MLA
• CHICAGO
(“Project Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
(Project Essay Example | Topics and Well Written Essays - 1500 Words)
https://studentshare.net/other/12465-project.
“Project Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.net/other/12465-project.

Summary

PowerCo: Your Analysis and Report Introduction This assignment deals with the feasibility and viability of the project considered by PowerCo. The project is about building up a generator, which would be used to produce electricity. In the beginning two years, the generator will be built…
Author : elehner
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Project"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Project
In the current world, having motors capable of producing high power output is a necessity. This is because such motors are driven in extreme conditions requiring high speed, and abrupt changes in direction as well as being subjected to heavy loads. It is not easy to find motors for use in such conditions under a tight budget.
4 pages (1000 words) Essay
Project
ion class 16 7.4 Building ontology 16 Chapter 8 Evaluation 17 8.1 project approach evaluation 18 8.2 project objectives evaluation 18 8.3 Academic objectives evaluation 19 8.4 Personal objectives evaluation 20 Chapter 9 21 OWL ontology and UML 21 Chapter 10 22 10.1 conclusion 22 10.2 Recommendation 23 Appendix 1 - Taxonomy 23 Appendix 2 - prototype Ontology 23 Glossary 25 TABLE OF FIGURES Figure 1.1: A snapshot of ontology classes.
17 pages (4250 words) Essay
Project
It is very difficult to explain my problems to others, in particular, to my family. I usually keep my emotions to myself, control my facial expressions, and body
4 pages (1000 words) Essay
Project
ave been an increasing number of fraudsters who thrive on the weaknesses in the software and make use of the data base of other people for illegitimate purposes. Thus any organization or individual who is a user of the internet for commercial or other purposes has been made the
8 pages (2000 words) Essay
Project
Robert Kaplan of Harvard Business School and Dr. David Norton. The main point of difference between Balanced Scorecard and general management systems/tools is that these general management tools focus primarily on the financial performance of the firm and that too
8 pages (2000 words) Essay
Project
In this scenario corporate needs a more collaborative network technology, which could offer the facilities of efficient data sharing and information transmission. For this reason the most appropriate proposed technology is
3 pages (750 words) Essay
Project
Not only companies, qualitative research can be conducted by any individual also. In this research method, it becomes difficult to analyze the data as they are not quantitative in nature.
12 pages (3000 words) Essay
Project
The SWOT analysis to be described in this project will help Garnier Company to come up with more processes in developing their products. The whole growth rate
2 pages (500 words) Essay
Project
As it shall be revealed during the training, interviewing is a crucial tool in company management, especially during employee recruitment. It allows managers to interact with potential
1 pages (250 words) Essay
Project
In addition, the use of a survey enabled analyzing customer’s perception and level of satisfaction in various services. The Survey was availed to the customers through the social media pages of the two companies. The customers were
2 pages (500 words) Essay
Click to create a comment
+16312120006