...APPENDIX P: Project Costs and Schedule Risk Analysis Report LCA CONVEY ATCHAFALAYA RIVER WATER TO NORTHERN TERREBONNE MARSHES AND MULTIPURPOSE OPERATION OF THE HOUMA NAVIGATION LOCK FEASIBILITY STUDY FOR ST. LOUIS DISTRICT, ST. LOUIS, MO Prepared for: St. Louis District, St. Louis, MO __ Prepared by: Paige Scott __________________ Date: __03 May 2010 ________ TABLE OF CONTENTS EXECUTIVE SUMMARY ................................................................................................ 1 1. PURPOSE ................................................................................................................. 3 2. BACKGROUND......................................................................................................... 3 3. REPORT SCOPE ...................................................................................................... 3 3.1 Project Scope .................................................................................................... 4 3.2 USACE Risk Analysis Process .......................................................................... 4 4. METHODOLOGY/PROCESS .................................................................................... 5 4.1 Identify and Assess Risk Factors ....................................................................... 6 4.2 Quantify Risk Factor Impacts ............................................................................. 7 4.3 Analyze Cost Estimate and Schedule...
Words: 6816 - Pages: 28
...Intl Project Management Cost & finance Part 2 : Tools and techniques SupdeCo La Rochelle (H. Khatchadourian) Aligned with the PMBOK® Guide Fourth Edition 1 Investment Concept & project investment Investment : basics The process of compounding and discounting Compound interest and future value (FV) of a single payment (« lump sums ») FVn = PV(1+I)n With N number of period (= years, quarters,months) I interest rate PV present value FV future value at end of year « n » Step-by-step approach or formula approach Use of spreadsheets (Excel) 1. Int. 2. Scope 3. Time 4. Cost 5. Quality 6. HR 7. Com. 8. Risk 9. Proc. Investment: basics Present value (PV) PV = FVn / (1+I)n Step-by-step approach and formula approach Finding the interest rate « i » ? Finding the number of years « n » ? 1. Int. 2. Scope 3. Time 4. Cost 5. Quality 6. HR 7. Com. 8. Risk 9. Proc. Investment: basics Annuities (ordinary) A series of payments over time At the end of each period Periods 0 5% 1 2 3 Payments -100€ -100€ -100€ 1. Int. 2. Scope 3. Time 4. Cost 5. Quality 6. HR 7. Com. 8. Risk 9. Proc. Annuities (due) At the beginning of each period Investment: basics Future value of an ordinary annuity With ⎡ (1 + I )n − 1⎤ FVAn = PMT ⎢ ⎥ I ⎣ ⎦ Interest rate I Series of payment (= constant payment) 1. Int. 2. Scope 3. Time 4. Cost 5. Quality 6. HR 7. Com. 8. Risk 9. Proc. Investment: basics Future value of an ordinary annuity Periods 0 r=5%...
Words: 10588 - Pages: 43
...diversify horizontally. With such resources and capital, the company has to oversee so many opportunities and ventures. Presently the company is at odds over whether they should use a company wide cut off rate based on the overall weighted average cost of capital or if Pioneer should use multiple rates that reflect risk-profit characteristics of the several businesses or economic sectors. At first we must decide if the methodology used in computing the company’s overall weighted average cost of capital is just. Second, we should decide in which terms Pioneer adheres to future investments. Should they adjust discount rates for different divisions and projects and stay away from a universal cutoff rate? Third, the capital budgeting criteria must be set for different projects across Pioneer’s divisions. What distinctions among projects need to be noted and how the standards should be determined are all questions that arise from judging how to proceed forward. Estimated overall corporate weighted average cost of capital: We assume all the basic data are correct. Given is the future Debt/Equity ratio (Estimated Proportions of future Funds Sources). Also Pioneer’s cost of equity was given as 10% (Rs). The company’s after tax cost of debt was 7.9% (Rb*(1-Tc). Tax rate was 34%. From the formula: Rwacc = Equity/(Equity+Debt)*Rs +...
Words: 1482 - Pages: 6
...RISK MANAGEMENT PLAN PROJECT: Re-design County Animal Shelter PROJECT DESCRIPTION SUMMARY: This County is in need of a re-developed animal shelter. My project entails redesigning the local animal shelter by making it more efficient and safer for the shelter animals and staff. The building is over thirty years old and is in need of a lot of reconstruction to make it a safe environment and something that will ensure disease protection to all the animals at the shelter. PROJECT MANAGER: Michael Pastore DATE: September 29, 2011 Risk Identification I have made a list of all areas that might cause project delays or failure with their respective outcomes (see numerical list below). The five risks I have chosen as key risks are bolded below and appear in the Risk Assessment Table. 1. Delay in getting appropriate permits approved. Department Form # AW-1 needs approved, IACUC inspection for animal safety and welfare needed as well. 2. Delay in caging material and other needed materials for project completion. This is lack of needed items to re-build shelter cages inside and outside. 3. Weather issues causing delay in outside work. This could cause construction delays on the roof and the outside fencing area. 4. Cost risk-over budget. This would include running out of money to fund the entire project if more money is needed. This is a non-profit organization and the amount of funding is being donated to re-design the shelter. 5. Equipment delay. Equipment...
Words: 1424 - Pages: 6
...flows, even though depreciation is not a cash expense. b. Corporations should fully account for sunk costs when making investment decisions. c. Corporations should fully account for opportunity costs when making investment decisions. d. Statements a and c are correct. e. All of the statements above are correct. Relevant cash flows Answer: c Diff: E . A company is considering a new project. The company’s CFO plans to calculate the project’s NPV by discounting the relevant cash flows (which include the initial up-front costs, the operating cash flows, and the terminal cash flows) at the company’s cost of capital (WACC). Which of the following factors should the CFO include when estimating the relevant cash flows? a. Any sunk costs associated with the project. b. Any interest expenses associated with the project. c. Any opportunity costs associated with the project. d. Statements b and c are correct. e. All of the statements above are correct. Relevant cash flows Answer: d Diff: E . When evaluating potential projects, which of the following factors should be incorporated as part of a project’s estimated cash flows? a. Any sunk costs that were incurred in the past prior to considering the proposed project. b. Any opportunity costs that are incurred if the project is undertaken. c. Any externalities (both positive and negative) that are incurred if the project is undertaken. d. Statements b and c are correct. e. All of the statements above are correct. ...
Words: 21266 - Pages: 86
...following terms: a. Project cash flow; accounting income b. Incremental cash flow; sunk cost; opportunity cost; externality; cannibalization; expansion project; replacement project c. Net operating working capital changes; salvage value d. Stand-alone risk; corporate (within-firm) risk; market (beta) risk e. Sensitivity analysis; scenario analysis; Monte Carlo simulation analysis. f. Risk-adjusted discount rate; project cost of capital g. Decision tree; staged decision-tree analysis; decision node; branch h. Real options; managerial options; strategic options; embedded options i. Investment timing option; growth option; abandonment option; flexibility option a. Project cash flow: The process of inflow or outflow of cash in any project is called cash flow. In project cash flow the increase in income results cash inflow on the other hand, expenditure results cash outflow. Accounting income: Accounting income is the result after deducting the total sales revenue from its expenses. The result of accounting income and cash flow differs in the financial statement because accounting income makes records of both cash and non cash transaction. While in cash flow only pure cash transaction are recorded. b) Incremental cash flow: Incremental cash flow is the additional cash that company may receive by taking a new project. If a company sees positive incremental of cash flow then it means the company can get additional cash flow in future, if new project is accepted. ...
Words: 1697 - Pages: 7
...1st draft Do Thi Ha Phuong 18249037 RISK MANAGEMENT 641 - ASSIGNMENT NO 1 TOPIC: PROJECT RISK MANAGEMENT PROCESS PART A – APPLICATION About the company and its functions. Joint Stock Company BT20 is established in 28/03/2012. The company operates in road construction areas. The company is implementing a restoration, renovation National Highway 20 project in Vietnam, Required main tasks of company are: clearance and compensation, the basic construction work, mine clearance, leveling, construction of roads, drainage and wastewater treatment systems, trees, power supply system. As well as any other investment, construction investment is likely to encounter risks to be inefficient investment as originally planned. Type of risks | Sub risk | Sub-Sub risk | Financial | Cost increases | Unreasonable Estimated costs.Weak Project Management | Natural | Unfavorable weather | - Raining- Storm | | Disaster | - Blood- Earthquake- Flooding | Safety | Accident in construction site | - Delay the construction- Reducing on reputant of company. | Time | Project duration is extended | - Cost for material increase- Lack of employee’s skills- Wrong estimate on cost- Lack of skill on project management. | 1. RISK IDENTIFICATION The effectiveness of the project is determined by three factors that are quality, cost and time (Saladis and Kerzner 2011). For the before and during the construction of NH20, the cost is considered to be one of the serious issues because...
Words: 4121 - Pages: 17
... |[Department Address] | Business Case [Project Name] NOTE TO READER: “Business Case Usage Guidelines” have been developed to accompany this template. | |Table of Contents | | | | Executive Summary 2 Background 3 Problem / Opportunity 3 Current Situation 3 Project Description 4 Project Description 4 Objectives 4 Scope 4 Out of Scope 4 Anticipated Outcomes 4 Stakeholders 5 Strategic Alignment 6 Environment Analysis 7 Alternatives 8 Business & Operational Impacts 9 Project Risk Assessment 10 Risk of Project and each Alternative (Not including Status Quo) 10 Risk of Not Proceeding with Project (Status Quo) 11 Cost/Benefit Analysis 12 Quantitative Analysis – Financial Cost & Benefit: 12 Qualitative Analysis – Non-Financial Benefits & Costs: 14 Assumptions 14 Conclusions & Recommendations 15 Conclusions 15 Recommendations 15 Project Responsibility 15 Project Accountability 15 Implementation Strategy 16 Review & Approval Process 17 Review Process 17 Approval Process...
Words: 3948 - Pages: 16
...Risk Management Plan Table of Contents 1 Executive Summary.......................................................................................................... 1.1 Purpose.......................................................................................................................... 2 Risk Management Strategy............................................................................................... 2.1 Risk Identification........................................................................................................... 2.2 Risk Responsibilities....................................................................................................... 2.3 Risk Assessment ............................................................................................................. 2.4 Risk Response................................................................................................................. 2.5 Risk Mitigation ............................................................................................................... 2.6 Risk Contingency Planning............................................................................................. 2.7 Tracking and Reporting .................................................................................................. 2.8 Processes to Address Immediate Unforeseen Risks ....................................................... 1 Executive Summary Risk is defined as an event that has...
Words: 3635 - Pages: 15
...and PMBOK® Guide are trademarks of the Project Management Institute, Inc. PMI® has not endorsed and did not participate in the development of this product. Integration Management Process Name Develop Project Charter Inputs Outputs Tools and Techniques Project Statement of Work Business Case Project Charter Experts Judgment Project Management Plan Experts Judgment Project Management Plan Approved Change Requests Deliverables Work Performance Information Experts Judgment Project Management Information System Enterprise Environmental Factors Change Requests Organizational Process Assets Project Management Plan Updates Contracts Enterprise Environmental Factors Organizational Process Assets Develop Project Management Plan Project Charter Outputs From Planning Processes Enterprise Environmental Factors Organizational Process Assets Direct and Manage Project Execution Project Document Updates Project Management Plan Performance Reports Change Requests Project Management Plan Updates Enterprise Environmental Factors Monitor and Control Project Work Experts Judgment Project Document Updates Organizational Process Assets Project Management Plan Work Performance Information Change Requests Status Updates Project Management Plan Updates Change Requests Perform Integrated Change Control Experts Judgment Change Control Meetings Project Document Updates Enterprise Environmental...
Words: 3026 - Pages: 13
...CHAPTER 7—PROJECT CASH FLOWS AND RISK TRUE/FALSE 1. If an investment project makes use of land that the firm currently owns, the project should be charged with the opportunity cost of the land. 2. Net incremental operating cash flow is calculated by adding back the change in depreciation to the change in income after taxes. 3. A key difference between replacement and expansion project analyses is that with replacement, the incremental cash flows are measured as the net difference between projected cash flows from the current productive assets and cash flows of the proposed new productive assets. 4. Empirical studies of risk strongly support the contention that investors who are well diversified focus exclusively on market risk when they establish required returns. 5. Quantification of risk is the easiest part of incorporating risk into capital budgeting; treatment of that calculated risk measure is more difficult. 6. If a firm is considering purchasing an asset whose beta is greater than the current beta of the firm, it should use a discount rate greater than the firm's average required rate of return to evaluate the possible investment. 7. Capital budgeting decisions must be based on the accounting income the project generates since stockholders are concerned with the reported net income the firm generates. 8. A sunk cost is a cash outlay that has already been incurred and that cannot be recovered regardless of whether the project is accepted or rejected. These sunk costs are extremely...
Words: 4208 - Pages: 17
...Risk Factor Analysis— A New Qualitative Risk Management Tool John P. Kindinger, Probabilistic Risk and Hazards Analysis Group, Los Alamos National Laboratory John L. Darby, Probabilistic Risk and Hazards Analysis Group, Los Alamos National Laboratory Introduction Project risk analysis, like all risk analyses, must be implemented using a graded approach; that is, the scope and approach of the analysis must be crafted to fit the needs of the project based on the project size, the data availability, and other requirements of the project team. Los Alamos National Laboratory (LANL) has developed a systematic qualitative project risk analysis technique called the Risk Factor Analysis (RFA) method as a useful tool for early, preconceptual risk analyses, an intermediate-level approach for medium-size projects, or as a prerequisite to a more detailed quantitative project risk analysis. This paper introduces the conceptual underpinnings of the RFA technique, describes the steps involved in performing the analysis, and presents some examples of RFA applications and results. project activity flow chart to help organize the RFA. The flow chart defines the tasks to be modeled and their interrelationships for the project schedule analysis. WBS and schedule tasks may be consolidated and/or expanded to explicitly highlight those tasks and influences that are expected to have a significant technical risk and/or significant uncertainty in schedule or cost performance. The flow chart is developed...
Words: 2257 - Pages: 10
...Project Management PlanMerger & Acquisition Project for The Bag Co with ABC Leather Ltd Prepared by: MSc/ AdvDip Project Management Practices (2011 Batch) Students (Team -1) Marcus Ellenby Mohamed Abdurazak Myrka Freua Vivek Jha PROJECT MANAGEMENT PLAN Contents 1 Introduction .................................................................................................................................... 3 1.1 Objectives................................................................................................................................ 3 1.2 Vision Statement..................................................................................................................... 3 1.3 Key Milestones and KPIs ......................................................................................................... 4 2 Project Organisation ....................................................................................................................... 5 3 Project Roles and Responsibilities .................................................................................................. 5 3.1 3.2 Work Breakdown Structure .................................................................................................... 6 3.3 Organisation Break down Structure........................................................................................ 6 3.4 4 Work Details......................................
Words: 5246 - Pages: 21
...4T12 Project FEASIBILITY STUDY GUIDELINE This guideline is to be used in preparing a feasibility study for major projects. This is different to the work carried out in the Infrastructure Planning examined in Module 2 because we are now concerned with the details of a particular project as opposed to the overall planning of a whole multi-year infrastructure programme. The term “feasibility study” is used as a convenient description for the output for the work done, users of this toolkit should not apply preconceived notions of what a feasibility study consists of. Stated as simply as possible, the work done here must show that the project: ➢ is in accordance with predetermined needs; ➢ is the most suitable technical solution to the needs; ➢ can be implemented within any capacity constraints of the Institution which operates; ➢ has been subject to a due diligence that shows it is legally, physically and socially compliant; ➢ is fully costed over the whole life of the project; ➢ has taken due cognisance of the risks associated with its whole life cycle; and ➢ is affordable to the institution responsible for the project in the context of the available budget; The feasibility study guideline set out below is for a comprehensive document that, in many instances simply uses information already collected and set out as part of the steps carried out by the Institution. That said it is necessary to create a study that creates a holistic justification...
Words: 4935 - Pages: 20
...Silver Fiddle Construction Risk Management Plan Silver Fiddle Construction Grand Junction, Colorodo (770)468-7414 Sullivan8286@hotmail.com 2/6/2013 Joshua Sullivan Unit 6 Assignment 1 Risk Management Plan (Final Course Project) Assessing and Mitigating Risk Instructor: Denise Eggersman Version # | ImplementedBy | RevisionDate | ApprovedBy | ApprovalDate | Reason | 1.0 | Joshua Sullivan> | 02/03/2013 | <Bolo and Isabella Czopek> | <02/08/2013> | Initial Risk Management Plan draft | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TABLE OF CONTENTS 1 INTRODUCTION 1 1.1 Purpose Of The Risk Management Plan 1 2 risk management Procedure 1 2.1 Process 1 2.2 Risk Identification 1 2.3 Risk Analysis 1 2.3.1 Qualitative Risk Analysis 1 2.3.2 Quantitative Risk Analysis 2 2.4 Risk Response Planning 2 2.5 Risk Monitoring, Controlling, And Reporting 2 3 Risk Management Plan Approval 2 Conclusion 3 APPENDIX A: sWOT ANAYLSIS 4 APPENDIX B: RISK MATRIX …………………….............................................5 APPENDIX C REFERENCES……………………...............................................6 Introduction Purpose Of The Risk Management Plan * A risk is an event or condition that, if it occurs, could have a positive or negative effect on a project’s objectives. Risk Management is the process of identifying, assessing, responding to, monitoring, and reporting risks. This Risk Management Plan defines how risks associated with the Silver...
Words: 1580 - Pages: 7
