PM0012 – PROJECT FINANCE AND BUDGETING

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ASSIGNMENT

DRIVE	SPRING 2015
PROGRAM	MBADS (SEM 3/SEM 5) MBAFLEX/ MBA (SEM 3) PGDPMN (SEM 1)
SUBJECT CODE & NAME	PM 0012 – PROJECT FINANCE AND BUDGETING
BK ID	B1938
CREDITS& MARKS	4 CREDITS & 60 MARKS

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.

Q. 1. Write short notes on:

a) Project cost estimation:A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process. The cost estimate has a single total value and may have identifiable component values. A problem with a cost overrun can be avoided with a credible,

b) Role of project sponsors:The Project Sponsor is the individual (often a manager or executive) with overall accountability for the project.

The Project Sponsor is primarily concerned with ensuring that the project delivers the agreed business benefits.

The Project Sponsor acts

c) Trade credit:Trade credit is the credit extended by one trader to another for the purchase of goods and services. Trade credit facilitates the purchase of supplies without immediate payment. Trade credit is commonly used by business organisations as a source of short-term financing. It is granted to those customers who have

d) Importance of project budget: If you do not have a good budget, you cannot judge contract proposals. You will always leave money on the table if you do not come to the table equipped with a good budget.  Not having a good budget also upsets the project sponsors because you have to go to them every time you realize your need more money, which is usually the case or not?

Q. 2. Answer the following questions:

1. What is a Letter of Intent (LOI)? What is its purpose?

Answer:A letter of intent (LOI or LoI, and sometimes capitalized as Letter of Intent in legal writing, but only when referring to

2. What are the basic features of EPC (Engineering, Procurement and Construction) contracts? Give any 4 advantages of entering into a EPC contract?

Answer:In academia, a letter of intent is part of the application process,[clarification needed] in which it is also known as a statement of purpose or application essay. In education in the United States, letters of intent are also frequently reached between high school senior athletes and colleges/universities, for the

Q. 3. Explain the different key project documents.

Answer:In Project Management, one of the major responsibilities of the project manager is to keep proper documentation for the project and to keep the documents up to date. At any point in time during the life of the project, these documents

Q. 4. Write short notes on:

a) Developments in financing of construction projects in India:Financing arrangements differ sharply by type of owner and by the type of facility construction. As one example, many municipal projects are financed in the United States with tax exempt bonds for which interest payments to a lender are exempt from income taxes. As a result, tax exempt municipal bonds are available at lower interest charges. Different institutional arrangements have evolved for specific types of facilities and organizations.

b) Importance of cost of capital in project selection: The cost of various capital sources varies from company to company, and depends on factors such as its operating history, profitability, credit worthiness, etc. In general, newer enterprises with limited operating histories will have higher costs of capital than established companies with a solid track record, since lenders and investors will demand a higher risk premium for the

c) Principles employed by organisations to manage working capital:Implementing an effective working capital management system is an excellent way for many companies to improve their earnings. The two main aspects of working

Q. 5. What are the problems associated with BOOT projects.

Answer: A BOOT funding model involves a single organisation, or consortium (BOOT provider) designing, building, funding, owning and operating the scheme for a defined period of time and then transferring this

Q. 6. Explain the different types of management contracts (a type of PPP )

List the types of management contracts

Explain each type of management contract

Answer:Project management contracts are legal agreements between you and your customers. You select which contract best suits the project and negotiate the terms. The contract spells out the duties of each party while the contract is in force. It tells how much income you earn and itemizes your expenses for that particular job. The contract terms can be fixed or fluctuate as your actual costs change. Project management contracts

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