Group & Individual Assignment

PROJECT FINANCIAL AND PROCURMENT
MANAGEMENT ASSIGNMENT
Instruction
1. From Part I; 1,2,5,7,10,13,15,17,20 and 26 are individual assignment
2. From Part II; question No. 1 and 4 are Individual Assignment
3. The rest of the questions are group assignment
4. Copying from a given material (PPt)is not acceptable
5. Assignment Document should be in the Pdf format
6. Assignment should be submitted to the dean office
7. Submission date up to Sene, Saturday 03/2015E.C
8. Final Examination will be on Sene, Sunday 04/2015
PART I: DISCUSSION QUESTIONS

• Discuss the following questions clearly and precisely.
1. What does it mean Finance?
2. What is the difference between cost and expense? Give an example.
3. What do mean Project budget?
4. Discuss the steps of the project budget determining process?
5. Why is Procurement Management important?

6. What budget determining inputs can be considered in project budget preparation?
7. Explain the tools and techniques you can draw on to prepare your project budget.
8. What is the usefulness of cost report?

9. Ways to improve efficiency within procurement management
10. List and discuss the key points included in progress report?
11. What are the objectives of procurement management?
1
12. Explain the importance of progress report?
13. Explain the types of progress report.
14. What are the types of procurement?

15. What is monitoring and Impact valuation mean?
16. What are the objectives of cost management?
17. Explain cost management vs cost controlling
18. Key Steps for Successful Procurement Management

19. What are the steps in the procurement process?
20. Financial Accounting, Cost Accounting & Management accounting how could you respond
to him/her?
21. Do you think that the Management Accountant has the roles in a Modern Organization?
If yes what are those roles?
22. State the difference between cost and Expenses
23. Based on the following Criteria, classify and discuss the cost;
a. Time period
b. Management function
c. Based on their traceability to a particular cost object
d. Based on their behavior pattern
e. Based on reporting standards (IFRS/GAAP)
f. Based on decision making process
g. Based on controllability
h. Other cost classification
24. Discuss the five internal sources of finance with their advantage and advantages
25. Discuss the five external sources of finance with their advantage and advantages
26. Elaborate the Factors Affecting Choice of Source of Finance
27. Describe at least 6 project classification
2
PART II: WORKOUT
Q1. Assume that you are considering two mutually exclusive development projects with equal
initial capital investment requirement of $100,000 the following is the estimated cash inflows from
the projects at the end of each year. The applicable interest rate is supposed to be 10 percent
annually.
Projects Cash inflows at the end of
1st year 2nd year 3rd year 4th year 5th year
Project 1 $10,000 $15,000 $25,000 $50,000 $60,000
Project 2 $45,000 $30,000 $25,000 $15,000 $10,000
Required:
A. Determine the net present values of project 1 & 2.

B. Which project should be rejected by using net present value? Criteria? And why?
C. Determine Benefit-cost ratios of the two projects.
D. Which project should be rejected if the projects are mutually exclusive?
E. Calculate the payback period and make decision for each Project.
F. Which project should be rejected by using payback period?
Q2. Consider the following two mutually exclusive investments.

Year Investment A Investment B
0 -$100 -$100
1 50 70
2 70 75
3 40 10
Required
a. Calculate the IRR for each project

b. Under what circumstances will the IRR and NPV criteria rank the two projects differently?
3
Q3. You have given a three-year project with a projected net income of $1,000 in year 1, $2,000
in year 2, $4,000 in year 3. The cost is $9,000, which will be depreciated straight-line to zero over
the 3-year life of the project.
Required
a. Determine Average Net income & Average book value of the project.
b. Calculate Average Accounting Return (AAR) of the project.
Q4. Zoom Company manufactures and sells a telephone answering machine. The company’s
income statement for the most recent year is given below:
Total
Sales (20,000 units) Br. 1,200,000
Variable expenses 900,000
Contribution Margin Br. 300,000
Fixed Expenses 240,000
Net Income 60,000
Based on the above data, answer the following questions.
Required: (Use)
a. Compute the company’s CM ratio and variable expense ratio.
b. Compute the company’s break-even point in both units and sales birrs. Use Equation,
Contribution Margin and Graphic Method to compute the break-even point.
c. Assume that sales increase by Br. 400,000 next year. If cost behavior patterns remain
unchanged, by how much will the company’s net income increase?

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PROJECT FINANCIAL AND PROCURMENT

PART I: DISCUSSION QUESTIONS

5. Why is Procurement Management important?

8. What is the usefulness of cost report?

11. What are the objectives of procurement management?

14. What are the types of procurement?

18. Key Steps for Successful Procurement Management

Projects Cash inflows at the end of

Project 1 $10,000 $15,000 $25,000 $50,000 $60,000

Project 2 $45,000 $30,000 $25,000 $15,000 $10,000

A. Determine the net present values of project 1 & 2.

Q2. Consider the following two mutually exclusive investments.

a. Calculate the IRR for each project

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