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ASSIGNMENT
DRIVE
PROGRAM/SEMESTER
SUBJECT CODE & NAME
BOOK ID
CREDITS
MARKS

FALL DRIVE 2013
MBADS – (SEM 4/SEM 6) / MBAN2 /
MBAFLEX – (SEM 4) / PGDISMN (SEM 2)
PM0012 – Project Finance
B1238
4
60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be
approximately of 400 words. Each question is followed by evaluation scheme.

Q1. Evaluate the golden rules of project risk management.10 marks(300-400) words
Answer : Rule 1: Make Risk Management Part of Your Project
The first rule is essential to the success of project risk management. If you don't truly embed risk
management in your project, you can not reap the full benefits of this approach. You can encounter
a number of faulty approaches in companies. Some projects use no approach whatsoever to risk
management. They are either ignorant, running their first project or they are somehow confident
that no risks will occur in their project (which of course will happen).
Rule 2: Identify Risks Early in Your Project
The first step in project risk management is to identify the risks that are present in your project. This
requires an open mind set that focuses on future

Q2. Explain different types of discounted cash flows10 marks(300-400) words
Answer : Discounted cash flow (DCF) is a valuation method used to estimate the attractiveness of an
investment opportunity. DCF analysis uses future free cash flow projections and discounts them
(most often using the weighted average cost of capital, which we'll discuss in section 13 of this
walkthrough) to arrive at a present value, which is then used to evaluate the potential for
investment. If the value arrived at through DCF analysis is higher than the current cost of the
investment, the opportunity may be a good

Q3. What are the decisions to be considered while making capital investment?10 marks(300-400)
words
Answer : Capital investment decisions also can be called ‘capital budgeting’ in financial terms. Capital
investment decisions aim includes allotting the capital investment funds of the firm in the most
effective manner to make sure that the returns are the best possible returns. Assessing projects as
well as the allocation of the capital depends on the project requirements are some of the most
crucial capital investment decisions aspects.
There might be many different criteria’s for choosing the appropriate and right capital investment
decision. For e.g., a company might stress on projects that assure for prompt returns while a few
other companies might assert on projects which ensure for a growth in the long term. The important
aim of capital investment decision is increasing the firms’ value by taking on a good project at the
perfect time.
The aim of a business while making capital

Q4. Explain IRR and WACC
10 marks(300-400) words
Answer : IRR stands for Internal Rate of Return, and last week reader Sandeep emailed me asking
about this, so I thought I’d do a post on the subject.
It’s impossible to understand IRR without understanding the concept of Net Present Value (NPV)
first, so let’s begin with NPV.
You know that the cash that you receive today is more valuable than the cash you receive two years
down the line or anytime in the future due to inflation. So, anytime you see cash flows going out in
the future you will ask yourself how much is all this money worth today? We are all familiar with this
concept because we see it every day in our life, and is relevant to a lot of things especially
retirement planning, and looking at things such as

Q5. What is sensitivity analysis? 10 marks(300-400) words
Answer : Sensitivity analysis is the study of how the uncertainty in the output of a mathematical
model or system (numerical or otherwise) can be apportioned to different sources of uncertainty in
its inputs. A related practice is uncertainty analysis, which has a greater focus on uncertainty
quantification and propagation of uncertainty. Ideally, uncertainty and sensitivity analysis should be
run in tandem.
Sensitivity analysis can be useful for a range of purposes, including:
Testing the robustness of the results of a model or system in the presence of uncertainty.
Increased understanding of the relationships between input and output variables in a system
or model.

by the analyst.
Q6. Analyse the parametric cost estimation. 10 marks(300-400) words
Answer : PCE - Definition
PCE is a set of cost estimating techniques based on estimating algorithms or cost estimating
relationships (CER) that are highly probabilistic in nature (i.e., the parameters or quantification
inputs to the algorithm tend to be abstractions of the scope). Typical parametric algorithms include,
but are not limited to, factoring techniques, gross unit costs, and cost models (i.e. algorithms
intended to replicate the cost performance of a process of system). Parametric estimates can be as
accurate as definitive estimates. (AACEI)

Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
call us at : 08263069601

Pm0012 – project finance

  • 1.
    Dear students getfully solved assignments Send your semester & Specialization name to our mail id : help.mbaassignments@gmail.com or call us at : 08263069601 ASSIGNMENT DRIVE PROGRAM/SEMESTER SUBJECT CODE & NAME BOOK ID CREDITS MARKS FALL DRIVE 2013 MBADS – (SEM 4/SEM 6) / MBAN2 / MBAFLEX – (SEM 4) / PGDISMN (SEM 2) PM0012 – Project Finance B1238 4 60 Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme. Q1. Evaluate the golden rules of project risk management.10 marks(300-400) words Answer : Rule 1: Make Risk Management Part of Your Project The first rule is essential to the success of project risk management. If you don't truly embed risk management in your project, you can not reap the full benefits of this approach. You can encounter a number of faulty approaches in companies. Some projects use no approach whatsoever to risk management. They are either ignorant, running their first project or they are somehow confident that no risks will occur in their project (which of course will happen). Rule 2: Identify Risks Early in Your Project The first step in project risk management is to identify the risks that are present in your project. This requires an open mind set that focuses on future Q2. Explain different types of discounted cash flows10 marks(300-400) words Answer : Discounted cash flow (DCF) is a valuation method used to estimate the attractiveness of an investment opportunity. DCF analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital, which we'll discuss in section 13 of this walkthrough) to arrive at a present value, which is then used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good Q3. What are the decisions to be considered while making capital investment?10 marks(300-400) words Answer : Capital investment decisions also can be called ‘capital budgeting’ in financial terms. Capital investment decisions aim includes allotting the capital investment funds of the firm in the most
  • 2.
    effective manner tomake sure that the returns are the best possible returns. Assessing projects as well as the allocation of the capital depends on the project requirements are some of the most crucial capital investment decisions aspects. There might be many different criteria’s for choosing the appropriate and right capital investment decision. For e.g., a company might stress on projects that assure for prompt returns while a few other companies might assert on projects which ensure for a growth in the long term. The important aim of capital investment decision is increasing the firms’ value by taking on a good project at the perfect time. The aim of a business while making capital Q4. Explain IRR and WACC 10 marks(300-400) words Answer : IRR stands for Internal Rate of Return, and last week reader Sandeep emailed me asking about this, so I thought I’d do a post on the subject. It’s impossible to understand IRR without understanding the concept of Net Present Value (NPV) first, so let’s begin with NPV. You know that the cash that you receive today is more valuable than the cash you receive two years down the line or anytime in the future due to inflation. So, anytime you see cash flows going out in the future you will ask yourself how much is all this money worth today? We are all familiar with this concept because we see it every day in our life, and is relevant to a lot of things especially retirement planning, and looking at things such as Q5. What is sensitivity analysis? 10 marks(300-400) words Answer : Sensitivity analysis is the study of how the uncertainty in the output of a mathematical model or system (numerical or otherwise) can be apportioned to different sources of uncertainty in its inputs. A related practice is uncertainty analysis, which has a greater focus on uncertainty quantification and propagation of uncertainty. Ideally, uncertainty and sensitivity analysis should be run in tandem. Sensitivity analysis can be useful for a range of purposes, including: Testing the robustness of the results of a model or system in the presence of uncertainty. Increased understanding of the relationships between input and output variables in a system or model. by the analyst. Q6. Analyse the parametric cost estimation. 10 marks(300-400) words Answer : PCE - Definition PCE is a set of cost estimating techniques based on estimating algorithms or cost estimating relationships (CER) that are highly probabilistic in nature (i.e., the parameters or quantification inputs to the algorithm tend to be abstractions of the scope). Typical parametric algorithms include, but are not limited to, factoring techniques, gross unit costs, and cost models (i.e. algorithms intended to replicate the cost performance of a process of system). Parametric estimates can be as accurate as definitive estimates. (AACEI) Dear students get fully solved assignments Send your semester & Specialization name to our mail id :
  • 3.