Reference no: EM132316063

Assessment - Individual Report

Assessment Description

In this assessment in Part A students are asked to imagine they have been engaged by Apple (Apple Inc APPL) (or a similar technology company) to develop a report on key aspects of project risk management and how they might be used in proposed future projects in order to manage and limit risk.

In Part B you are asked to conduct a capital budgeting analysis for the Apple Corporation.

Content and process PART A

Imagine you have been engaged by a technology company to develop a report on key aspects of project risk management. Please chose a company in the technology sector (based anywhere in the world) and write a report to address the below areas. The report should begin with a short executive summary and conclude with several, short general recommendations.

The content you include in the report should link the project management principles detailed above with the practices of the technology company you have chosen.

The topics on which students need to make recommendations in their report include:

i) Project selection - How should the company you select determine what projects to undertake and what ones to avoid? What tools, measures, and practices are available to project analysts in this industry?

ii) Cost management - What is the role of project cost management for your chosen company? Why is it important? What strategies or approaches should the company you have chosen adopt in order to effectively manage project costs?

iii) Funding - What funding measures or options are generally available to assist companies like the one you have chosen to fund proposed new projects? The report should include reference to any implications associated with different funding types or models.

iv) Implementation and winding up - Are there any particular issues associated with commencing a project that your company must consider? Why are they important? Who do they impact or affect? What happens when the project finishes? How are projects wound up? Do they just end or are there resource or infrastructure considerations? Are there environmental issues associated with the end of a project?

Where possible, students should relate each section back to the company they have chosen. The executive summary should bring together general recommendations for the student's chosen company relating to i)-iv).

Students should provide between 200-400 words per topic, together with approximately 300 words in total for the executive summary and final recommendations.

Criteria Requirement

i) Project Selection Describe tools and practices used to select a project for the chosen company.
Analyse an example of the practices used by your chosen to company to select between projects.
200-400 words

ii) Cost Management Describe the role and importance of a cost manager and strategies to manage project costs.
Recommend cost management strategies that your company should undertake with reference to theory and real-world data
200-400 words

iii) Funding Describe the sources of funding for projects and the benefits or costs of that funding (see topic 8).
Evaluate what funding options are available to your chosen company and determine the implications of these options.
200-400 words

iv) Implementation and winding up Outline the process and issues associated with starting and finishing a project.
Evaluate resource, infrastructure and environmental issues to do with your company's project implementations and make any relevant recommendations.
200-400 words

Summarise recommendations for project risk management for your company with reference to the analysis conducted in the relevant topics
Executive Summary, Conclusion and Recommendation The summary should briefly describe the main issues you identified in each section BUT MOST IMPORTANTLY
recommend to your chosen company the main things they MUST consider when managing/limiting risk in a project.
This is about applying what you have learnt to ADVISE what key things they need to focus om 3 marks

Conduct relevant research of project management literature and market data and information relevant to your company. Acknowledge your sources.
Appropriate in-text Harvard Referencing and reference list You must reference in text and have a reference list at the end of your assignment.
See Harvard referencing guide on Academic Success Centre portal page. 2 marks

PART B
Consider the following two sources and answer the following questions. Answer each question directly. You do not need to write a lot for each question and for some you will need to use excel calculations. Submit you excel spreadsheet together with your report

Source 1: Apple Yahoo Finance

Source 2: Forbes

a) According to the sources above does Apple currently have equity capital on issue? Why do companies raise equity capital? What has happened to the Apple share price in 2019 and why has this happened? (you will need to do some research here)

b) Below are details about a project Apple is undertaking. Please answer questions i-vi with the aid of an excel spreadsheet. You also need to answer the below questions in your word file and refer to your excel spreadsheets as a supporting document.

Apple's new IPhoneXI

• You are the financial analyst for Apple which is investing in a project to develop a new IphoneXI.
• The project will last for 4 years and require an initial capital outlay on new Machinery of
$5 million (paid today).
• The plant will be depreciated to $1 million book value over the 4 years and can be sold in year 5 for $2 million.
• The revenues from the sale of the new IPhone will be $2.8 million per year for the next four years (starting at the end of year 1). Variable costs will be 20% of revenues for the next four years.
• Apple's Research and Development department has spent $1 million researching demand for the new product as well as ways to address the battery problems and found that the project is feasible. The revenue for Apple's existing IPhoneX product is expected drop by $1 million per year for the next four years as a result of the new product.
• The project requires $30,000 for working capital immediately but it will not require any other working capital investments during its life. This working capital will be recovered in the last year of the project.
• The tax rate is 30%
• The project is funded only using ordinary shares which have a required return of 10%. So the cost of capital is 10%.

i) What are the FCFs for this project?

ii) What is the NPV of this project?

iii) State whether Apple should invest in this project and explain why or why not based on your calculations, research and sources 1-2.

iv) Is funding this project with ordinary shares the cheapest way to finance? Why or why not? Imagine Apple could refinance using only bonds. Would this affect its NPV? Why or why not?

Attachment:- Project risk - finance and monitoring.rar