This project report will be developed on the basis on assignment 1. As in the previous assignment literature review on project economic analysis and methodology has been done and in this paper financial model will be developing that includes assumptions, risks, cash flows i.e outflows and inflows, constraints, interest rate and the further economic analysis and after that on which basis financial model will be developed. This report is developed in relation with providing a proper set of information related. It is required that the previous aspects related with the project should be focused upon in an appropriate manner so as to ensure that the project could get completed accurately with less investment. This report will also avail the information related with cash inflows and the outflows so that projects could be completed in a proper manner and assurance could be made that less investment will be done and more return will be earned by the company on a particular project.
In this project report, option pricing financial model will be taken as this is suitable for the undertaken project report.
Option pricingfinancial model - This model is used to calculate the value of company stock like theoretical values of option. This model is useful for the organization to calculate the value of underlying prices, strike prices as well as to predict the future value of some factors like calculating the theoretical value of the particular options for a particular time period. As the value of options keep fluctuating according to the option life.(Pandey, 2008).
Assumptions including interest rates, inflation, project life
Various assumptions are behind the Option Pricing model, some of the assumptions are as follows-
Constraints- Each and every model possess some restrictions or limitations. Some of the constraints which are associated with this model and might be constraint for the undertaken project are-
Interest rates- Option pricing model is suitable for the undertaken project. In this pricing model, interest rates are assumed to be stable; this factor will deliver super benefits to the undertaken project. Fluctuations in economy would not be able to affect the rates of interest in the undertaken project in future. This will create a risk- free environment for the undertaken project.
Risks- It is important to assess all the risks associated with the undertaken project. As the risk in the project can disturb all the activities carried forward to execute the project and this in turn can affect the business activities, profitability and productivity. Identifying risk would be helpful for the project in term of getting the success of project which is undertaken. Evaluating all the risk factors and working upon them so as to reduce these risk factors will ensure to provide a proper set of support to the company (Chang, 2011). It is required that risk should be analysed and the strategies should be developed which could help in reducing or minimizing the risk factors with the effect of which company could sustain in an appropriate manner.
Risk associated with the project is not high as the model used for the undertaken project delivers risk free environment as the interest rates are assumed to be stable. To mitigate risk associated with the less information; more and more information about the option would be assessed.
Inflation- Rise in the price of option would not affect the undertaken project as the stability of interest rates would not affect stock. Inflation can affect the amount of options which have higher liquidity.
Cash inflow and Outflow -Managing cash inflow and outflow is another important aspect that need to be considered in respect with this undertaken project. It is required that the organizations indulged in this project so it should have the eye on all the cash inflows and outflows (Movahedian Attar, et. al., 2013). It is required that the organizations should have proper set of knowledge about what they are purchasing and what they are selling, in what quantity organization is purchasing the projects and services and in what quantity the sale is being done. Company will only be able to ensure that its project is being successfully developed when its cash inflow will be more than the cash outflow because it will help the company to grow stringer in the market and to ensure that it could work on various other projects so as to sustain and ensure the success of the project.(Byoun, Kim, & Yoo, 2013)
The cash flow statement is used to calculate the cash inflow and outflow of an undertaken project. That means it summarize the cash receipts (where cash comes from) and cash paid (where cash has gone). This makes the balance between the income statement and balance sheet. As it is analysed that this statement is made up from the three categories:(Cadle, & Yeates, 2008)
Operating statement – These statement is to be made on daily basis as it includes inventory purchases, selling products, wages that needs to be paid, operating expenses that are to be paid. This section is linked with the current liabilities and current assets. As it is shown in the above statement the net cash flow operating activity of the undertaken project is calculated as 147900.
Investing activities –Investing activities includes the cash receipts that are occurred from selling the equipment and property, collecting loans, selling of investment securities. It also includes the cash paid to purchasing property, payment of loan, purchasing of investment securities, etc. and as given in the statement the current cash flow that is generating for the undertaken project is to be calculated as 41400.
Financial activity – Financial activity includes cash receipts from stock issuance, borrowing, etc. and cash paid to stock repurchase, loans repayment, dividends etc. and it is analysed that net cash flow from financing activities for an undertaken project is to be calculated as 87000.
At last 19500 will be the revenue of the undertaken project which is shown as net increase in cash in the above cash flow statement.(Phillips, & Phillips, 2010).
Conclusion - On the basis of above cash flow statement, it is analysed that the undertaken project will be beneficial as it shows the net increment into the cash which is 19500 and that will be the generated revenue of this project. This project is suitable to implement as it is described above that the financial model which will be applied in this project will be best as interest rate cannot affect option pricing model because in this model interest rate is stable and does not fluctuate with the continuous movement of the market. So, this project can deliver benefit to the company so this this can be executed.(Yang, 2013).
With the help of the report developed it could be concluded that the organisations in present scenario should indulge in the market and competitive analysis aspects so as to gather appropriate set of information related with the project. Gaining appropriate set of information related with the financial analysis and various risk factors attached with the project will help the company to sustain in the market and will help in providing proper set of support to the company. In this undertaken project option pricing model will be used by which company can get maximum benefit as there is no possibility of risks as interest rate is stable in this model.
It is required that the companies should work on the path of success and sustainability as it will help the company in developing various new and effective set of strategies with the help of which company will be able to complete all the project with quality and within the deadlines which are planned by it. Completion of one project helps the company in getting another with the help of which it could attain competitive advantage and could earn better amount.
Byoun, S., Kim, J., & Yoo, S. (2013). Risk Management with Leverage: Evidence from Project Finance. Journal Of Financial And Quantitative Analysis, 1-65.
Cadle, J., & Yeates, D. (2008). Project management for information systems. Harlow, England: Financial Times/Prentice Hall.
Chang, Y. (2011). Does RFID improve firms’ financial performance? an empirical analysis. Information Technology And Management, 12(3), 273-285.
Chorafas, D. (2007). Risk management technology in financial services. Burlington, MA: Butterworth-Heinemann.
Fewings, P. (2013). Construction project management. 1st ed. New York: Spon Press/Routledge.
James, P. (2014). Project Financial Management and Modern Financial Slavery: The Case of a KSA Metro Project Start-up. Asian Journal Of Finance & Accounting, 6(2), 278.
Laumen, M., Kaufmann, T., Timms, D., Schlanstein, P., Jansen, S., & Gregory, S. et al. (2010). Flow Analysis of Ventricular Assist Device Inflow and Outflow Cannula Positioning Using a Naturally Shaped Ventricle and Aortic Branch. Artificial Organs, 34(10), 798-806.
Movahedian Attar, A., Khanzadi, M., Dabirian, S. and Kalhor, E. (2013). Forecasting contractor's deviation from the client objectives in prequalification model using support vector regression. International Journal of Project Management, 31(6), pp.924-936.
Pandey, D. (2008). Rural project management. New Delhi: New Age International (P) Ltd., Publishers.
Phillips, J. and Phillips, P. (2010). The power of objectives: Moving beyond learning objectives. Performance Improvement, 49(6), pp.17-24.
Velez-Pareja, I. (2012). Financial Analysis and Control - Financial Ratio Analysis (Slides). SSRN Electronic Journal, 28(1), 123-124.
Yang, L. (2013). Key practices, manufacturing capability and attainment of manufacturing goals: The perspective of project/engineer-to-order manufacturing. International Journal of Project Management, 31(1), pp.109-125.
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2018). Economic Analysis And Methodology. Retrieved from https://myassignmenthelp.com/free-samples/economic-analysis-and-methodology.
"Economic Analysis And Methodology." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/economic-analysis-and-methodology.
My Assignment Help (2018) Economic Analysis And Methodology [Online]. Available from: https://myassignmenthelp.com/free-samples/economic-analysis-and-methodology
[Accessed 26 January 2021].
My Assignment Help. 'Economic Analysis And Methodology' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/economic-analysis-and-methodology> accessed 26 January 2021.
My Assignment Help. Economic Analysis And Methodology [Internet]. My Assignment Help. 2018 [cited 26 January 2021]. Available from: https://myassignmenthelp.com/free-samples/economic-analysis-and-methodology.
MyAssignmenthelp.com is one of the noted service providers that deliver essay help. We provide tailored essay assistance to make sure that student gets online essay help exactly in the way they want it to be written. We at MyAssigemnthelp.com have built teams of consultants, who readily attend every query related to help me writing my essay. We provide essay writing help in forms of tips and steps in order o assist students with tough essay assignments.
Answer Introduction A standard can be established as a document that is established consensus and is approved by a recognized body (Crawford, Pollack and England 2007). The standard provides rules and guidelines to achieve an aimed objective. The different standards of project management that are used in different projects across the globe include PMBOK, P2M, ICB, PRINCE2, APM, Scrum and so on (Ghosh et al. 2012). Out of these the most widely...
Read MoreAnswer: Project manager is an important role in production of any firm. It is responsible for delivering the project mainly focusing on the targets. It manages a group of team with authority and responsibility to produce an on time and on budget end result. It is important for a project manager to process with company norms and methodologies meanwhile maintaining the relationship and managing the people under them. Project manager handles and ...
Read MoreAnswer Introduction The complex project management is different from various project management aspects. The main feature of the complex project is that the management of the project has the handle the different complexity of the project, there is slight difference between the project which is complex and the project which is complicated (Cicmil et al.,2017). The objective of the paper is to discuss various aspects of complex proj...
Read MoreAnswer: Showing rows 0 - 2 (3 total, Query took 0.0005 seconds.) SELECT * FROM `Performance` Student name Student level Experience Platform Student grade edwards senior ...
Read MoreAnswer: Introduction: Lean project management refers to the requirements that influence the changes in the customer values. The changes in the project management should be brought about as per the requirements of the customers. FIFA (Federation Internationale de Football Association) is an international sports body that organizes world cup every four years. The organisation of the World Cup 2018 in Australia would be an event of national prid...
Read MoreJust share requirement and get customized Solution.
Orders
Overall Rating
Experts
Our writers make sure that all orders are submitted, prior to the deadline.
Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.
Feel free to contact our assignment writing services any time via phone, email or live chat. If you are unable to calculate word count online, ask our customer executives.
Our writers can provide you professional writing assistance on any subject at any level.
Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.
Get all your documents checked for plagiarism or duplicacy with us.
Get different kinds of essays typed in minutes with clicks.
Calculate your semester grades and cumulative GPa with our GPA Calculator.
Balance any chemical equation in minutes just by entering the formula.
Calculate the number of words and number of pages of all your academic documents.
Our Mission Client Satisfaction
Very well done on time.Reached out of Expectations.Wish to consider more assignments from you
Australia
Thank you soo much i get full makes and it was full solution exactly like what i need , thank a lot :)
Australia
I got A+ on my paper and I was very excited. my writer did an amazing job. thank you
Australia
Very helpful and came just in time. I appreciate my assignment help and will be using again
Australia