PM0012 – PROJECT FINANCE AND BUDGETING

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DRIVE winter 2016

PROGRAM MBA

SEMESTER III

SUBJECT CODE & NAME

PM0012 – PROJECT FINANCE AND BUDGETING

1. Explain different types of resources in a project. Explain Estimation of Project Costs

1. Types of resources in a project

2. Estimation of Project Costs

Answer

A project may require different types of resources such as raw materials, machines, money, and manpower. The type and quantity of these resources vary from one project to another. For example, a construction project

2 Answer the following questions:

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

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

1. a. Define LOI

b. List any 4 purposes of LOI

2. a. briefly explain the 3 basic features of EPC contracts

b. List any 4 advantages of entering into EPC contracts

Answer: A Letter Of Intent (LOI) may be defined as an agreement between two or more parties to do business together before signing the contract. It signifies an intention to do the business at later date. It is the first step in negotiation of a commercial transaction to agree upon the business terms of the

3 Explain the different key project documents.

Description of key project documents

Answer: Key project documents

Business case: It is a kind of agreement or contract or a decision analysis report which signifies that the project has been approved for commencement. It is managed between two parties for offering of services. In the business case, the resources involved in the project along with its cost and schedule are mentioned.

Project plan: It is essential for effective management of the project. While the business case provides only the basic information, a project plan provides more extensive information about the project. It helps to know

4 Write short notes on:

·         Importance of cost of capital in project selection.

·         Principles employed by organisations to manage working capital

Answer:

Importance of Cost of Capital in Project Selection

The cost of capital plays a crucial role in project management. Capital is an integral part of a project as adequate amount of capital enables an organisation to complete the project on time. The organisation raises capital from various sources, such as debts, equities, joint ventures and loans. The capital cannot be raised

5 What are the problems associated with BOOT projects.

Explanation of the main problems associated with BOOT projects

Conclusion

Answer: Problems in BOOT Projects

Although BOOT model is beneficial for certain projects, there are many risks and problems associated with it and may act as a constraint in the implementation of these projects. The main problems associated with BOOT projects are as follows:

There are problems with BOOT projects in reaching the construction stage. There may be many reasons for this. One of those reasons may be unavailability of experienced developers. If the developer is not

6 What is project risk? List some risks associated with a construction project and a telecom project. Discuss the similarities and the differences.

·         project risk

·         risks associated with a construction project & telecom project

·         similarities and the differences between risks associated with a construction project & telecom project

Answer: Risk can be defined as any uncertain event that leads to losses. It is the probability or threat of damage, liability, loss or any other negative occurrence. A project risk is any event that may act as a constraint in successful completion of the p

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Send your semester & Specialization name to our mail id :

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(Prefer mailing. Call in emergency )