Nguyễn Thị Kiều Anh - Snow - F05014 BTEC BANKING ACADEMY OF VIETNAM HND IN BUSINESS (ACCOUNTING) ASSIGNMENT COVER SHEET NAME OF STUDENT REGISTRATION NO UNIT TITLE ASSIGNMENT TITLE ASSIGNMENT NO NAME OF ASSESSOR SUBMISSION DEADLINE Nguyễn Thị Kiều Anh - Snow - F05A F05-014 Unit 6: Business Decision Making Forecasting Techniques and Business Decisions of Jubred A Peñano June 13th, 2013 I, Nguyễn Thị Kiều Anh hereby confirm that this assignment is my own work and not copied or plagiarized from any source I have referenced the sources from which information is obtained by me for this assignment Signature _13th June, 2013 Date - FOR OFFICIAL USE Assignment Received By: Date: Nguyễn Thị Kiều Anh - Snow - F05014 Unit Outcomes Learning Outcomes Be able to produce information in appropriate formats for decision making in an organisational context LO3 Be able to use software – generated information to make decisions in an organisation Evidence for the criteria Feedback Assessor’s decision Produce graphs using spreadsheets and draw valid conclusions based on the information derived 3.1 Create trend lines in spreadsheet graphs to assist in forecasting for specified business information 3.2 Prepare a business presentation using suitable software and techniques to disseminate information effectively 3.3 Produce a formal business report 3.4 Use appropriate information processing tools 4.1 Prepare a project plan for an activity and determine the critical path 4.2 Use financial tools for decision making 4.3 Internal Verification LO4 Merit grades awarded M1 M2 M3 Distinction grades awarded D1 D2 D3 Nguyễn Thị Kiều Anh - Snow - F05014 Learning Outcomes Evidence for the criteria Feedback Assessor’s decision Internal Verification Assignment ( ) Well-structured; Reference is done properly / should be done (if any) Overall, you’ve Areas for improvement: ASSESSOR SIGNATURE DATE / / DATE / / NAME: (Oral feedback was also provided) STUDENT SIGNATURE NAME : FOR INTERNAL USE ONLY VERIFIED YES NO DATE : VERIFIED BY : NAME : Nguyễn Thị Kiều Anh - Snow - F05014 FORECASTING TECHNIQUES AND BUSINESS DECISIONS Prepared for: Mr Jubred Ada Peñano (Lecturer) Unit 6: Business Decision Making Banking Academy, Hanoi BTEC HND in Business (Finance) Prepared by: Nguyễn Thị Kiều Anh – Snow - F05A Registration No: ITP F05-014 Submission date: 13th June 2013 Nguyễn Thị Kiều Anh - Snow - F05014 TABLE OF CONTENTS EXECUTIVE SUMMARY This assignment contains basic knowledge about business decision making as well as help learner understand way to use techniques and method for calculating and forecasting as well as giving decision in specific situations It consists of main tasks as follows: • Task 1: Forecasting Techniques By using methods namely least square, additive model and proportional model, CMI can forecast sales in next year and make best decision in order to maximize profitability • Task 2: Management Information System (MIS) Based on levels of management including strategic management, tactical management and operational management, CMI can select information system which suitable for each department of CMI to improve the company performance and run business effectively • Task 3: Project plan Help learner understand the operational processes and techniques associated with project management and know way to plan a project and draw up a work breakdown structure • Task 4: Investment Appraisal Techniques Nguyễn Thị Kiều Anh - Snow - F05014 By using financial tools such as NPV and IRR to evaluate the potential project and proposed investment, the company can make decision whether should choose which project to invest brings more benefit for company INTRODUCTION CMI is a world-renowned manufacturer of private label, custom-made formulations and products, including skin care, hair care, body care, colour cosmetics, pharmaceuticals Company’s state-of-the-art facilities and highly motivated staff of professionals set us apart from their competitors in the cosmetics industry CMI offer many specialize services including: Clinical and scientific studies, comprehensive research and development, high production capacity, bulk products… (CMI, n.d) This report will show the methods, techniques such as forecasting methods, project plan, and investment appraisal techniques to forecast sales, identify suitable project for investment… Forecasting method will help company forecast actual sales in year 2012 There are methods: least square, additive model and proportional model to help company understand advantage and disadvantage of each method for using appropriate methods Investment appraisal techniques support company making decision in investment, analysis based on NPV and IRR Moreover, CMI will be suggested for using MIS instead of paper-driven system to improve company performance Nguyễn Thị Kiều Anh - Snow - F05014 Task 1: Forecasting Techniques Additive model The formula for additive model for time series analysis is Y = T + S + R Where Y is value of the changing valuable which is the actual volume of sale T is trend S is seasonal variation R is residual component Assuming the residual component is the seasonal component is S = Y - T The season variation for year 2006, 2007, 2008, 2009, 2010 and 2011 is as follows: Year Quarter 2006 2007 2008 2009 Actual volume of sales (Y) 500 350 4 250 400 450 350 200 300 350 200 150 400 550 ADDITIVE MODEL Moving total of Moving quarters’ average of sales quarters’ sales 1,500 1,450 1,450 1,400 1,300 1,200 1,050 1,000 1,100 1,300 1,450 2,950 2,900 2,850 2,700 2,500 2,250 2,050 2,100 2,400 2,750 3,000 Trend (T) Seasonal variation (Y-T) 368.75 362.50 356.25 337.50 312.50 281.25 256.25 262.50 300.00 343.75 375.00 -118.75 +37.50 +93.75 +12.50 -112.50 +18.75 +93.75 -62.50 -150.00 +56.25 +175.00 Nguyễn Thị Kiều Anh - Snow - F05014 2010 2011 4 350 250 550 550 400 350 600 750 500 400 650 1,550 1,700 1,700 1,750 1,850 1,900 2,100 2,200 2,250 2,300 3,250 3,400 3,450 3,600 3,750 4,000 4,300 4,450 4,550 406.25 425.00 431.25 450.00 468.75 500.00 537.50 556.25 568.75 -56.25 -175.00 +118.75 +100.00 -68.75 -150.00 +62.50 +193.75 -68.75 Table 1.1.1: Applying additive model on the sales of CMI’s skin care cream from 2006 to 2011 2006 2007 2008 2009 2010 2011 Total Average Adjustment to reduce ~ total variation to Final estimate of average quarterly variation Quarter Quarter Quarter -118.75 -112.50 -150.00 -175.00 -150.00 Quarter +37.50 +18.75 +56.25 +118.75 +62.50 +93.75 +93.75 +175.00 +100.00 +193.75 +656.25 +131.25 +12.50 -62.50 -56.25 -68.75 -68.75 -243.75 -48.75 +131.25 Total -706.25 -141.25 293.75 +58.75 0 0 -48.75 -141.25 +58.75 Table 1.1.2: The summary and average of seasonal variations The average seasonal estimates must therefore be corrected so that they add up to zero Average seasonal variations (in £000’s) from Quarter to Quarter are +131.25 (Quarter 1), -48.75 (Quarter 2), -141.25 (Quarter 3) and +58.75 (Quarter 4) The trend line indicates an increase of about 10.5263 per quarter This can be confirmed by calculating the average quarterly increase in trend line values between the third quarter of Year 2006 (468.75) and the second quarter of Year 2011 (368.75) The average rise is: Taking as 10.5263 as the quarterly increase in the trend, the forecast of sales for Year 2012, before seasonal adjustment (the trend line forecast) would be as follows: Nguyễn Thị Kiều Anh - Snow - F05014 Table 1.1.3: The trend line forecast in year 2012 Seasonal variation should now be incorporated to obtain the final forecast: Ye ar Quar ter 201 2 Trend line forecast 600.328 610.855 621.381 631.907 Adjustment average variation +131.25 Forecast actual of sale (in £’000s) 731.5789 -48.75 562.1052 -141.25 480.1315 +58.75 690.6578 Tot al 2464.47 Table 1.1.4: The forecast of actual sale of CMI for year 2012 With an average variation for Quarter of +131.25, the prediction for first quarter of year 2012 would have been 600.3289 + (+131.25) = 731.5789 Calculate the same for remaining quarter of year 2012  By using the additive method, the sales in year 2012 is forecasted about £2,464,470 We have chart for sales from year 2006 to year 2012: Chart 1.1: The line graph of additive method for years selling skin care cream Explanation: The method is to use the differences between the trend (T) and actual data (Y) This forecasting method basically relies on the time series analysis The model for time series as Y = T + S + R (with stands for the seasonal variation; R stands for the residual component) Extrapolation forecasting techniques is used by extending a trend line outside the range of known data to forecast the future from a trend line which based on historical data Therefore, firstly, we have to calculate a trend line using moving averages, and then values by the average seasonal variation applicable to the future period Because this method only simply adds absolute and unchanging seasonal variations to the trend figures; therefore using the additive model to forecast sales is less accurate  this effects significant on making business decision of the company Nguyễn Thị Kiều Anh - Snow - F05014 Proportional model The formula for proportional model for time series analysis is Y = T × S × R Where Y is value of the changing valuable which is the actual volume of sale T is trend S is seasonal variation R is residual component Assuming the residual component is the seasonal component is S =Y/T Year 2006 2007 2008 2009 2010 2011 The season variation for year 2006, 2007, 2008, 2009, 2010 and 2011 is as follows PROPORTIONAL MODEL Quarter Actual volume Moving total of Moving Trend Seasonal of sales quarters’ average of (T) percentage (Y) sales quarters’ sales (Y/T) 500 350 250 1,500 2,950 368.75 0.6780 400 1,450 2,900 362.50 1.1034 450 1,450 2,850 356.25 1.2632 350 1,400 2,700 337.50 1.0370 200 1,300 2,500 312.50 0.6400 300 1,200 2,250 281.25 1.0667 350 1,050 2,050 256.25 1.3659 200 1,000 2,100 262.50 0.7619 150 1,100 2,400 300.00 0.5000 400 1,300 2,750 343.75 1.1636 550 1,450 3,000 375.00 1.4667 350 1,550 3,250 406.25 0.8615 250 1,700 3,400 425.00 0.5882 550 1,700 3,450 431.25 1.2754 550 1,750 3,600 450.00 1.2222 400 1,850 3,750 468.75 0.8533 350 1,900 4,000 500.00 0.7000 600 2,100 4,300 537.50 1.1163 750 2,200 4,450 556.25 1.3483 500 2,250 4,550 568.75 0.8791 400 2,300 650 Table 1.2.1: Applying proportional model on the sale of CMI’s skin care cream from 2006 to 2011 2006 2007 Quarter (%) Quarter (%) 1.2632 1.0370 Quarter (%) 0.6780 0.6400 Quarter (%) 1.1034 1.0667 Total 10 Nguyễn Thị Kiều Anh - Snow - F05014 Figure 3.1: Gantt chart with total float time for project plan In Gantt chart, blue color is used to illustrate for the duration of activity and thin line describe the total float time • Identify duration and float time Activity A - Duration of activity A is Blue colors extended from day to day - Total float time is  The thin line last for day (only lie on day 5) Draw similarly with the remaining activities • Calculation of number of personnel Day 1, 2, and 4: Activity A, B must be run at the same time with activity A required personnel, activity B also required personnel  Number of personnel of day 1, 2, and is personnel: + = Calculate similarly with the remaining days The number of staff required for this project is shown in the resource histogram below Chart 3.2: Resources requirements of project plan Conclusion: From grant chart, it is easy to recognize that there are many activities have float time It means that there are many time for delaying The arrangement for activities of CMI is not feasible because some activities such as F, H, J, K, R, S, and W have float time too long As the result, although this work has already completed but still have to wait other activities 28 Nguyễn Thị Kiều Anh - Snow - F05014 for a long time to start Besides, arrangement of personnel for each activity also are not logical because there are too much or too less personnel work in the same day  lead to waste more time, cost for non-work activities Recommendation: CMI should arrange activities suitable to time for delaying activities more logically aim at save time and increase productivity as well as efficiency for work Besides, instead of focusing more staff on a specific day, CMI should focus more on allocation employees equally for some activities which have duty similarly in the company and more staff on long-term activities such as construct the showroom to reduce cost for human resources as well as time for implement whole project Task 4: Investment appraisal techniques Net Present Value (NPV) method a) Project Cash Flow (£000) (600) 10 200 400 50 10 60 Table 4.1: The NPV from year to year • Year Cash flow = (600) Discount factor = = = 1.000  = (600) × 1.000 = (600) • Year Cash flow = 10 Discount factor = = = 0.893  = 10 × 0.893 = 8.93 29 Nguyễn Thị Kiều Anh - Snow - F05014 Year • Cash flow = 200 Discount factor = = = 0.797  = £200 × 0.797 = £159.4 Year • Cash flow = £400 Discount factor = = = 0.712  = 400 × 0.712 = 284.8 Year • Cash flow = 50 There is a residential value at £10,000  this money will be added the last year  The cash flow of year is 50 + 10 = 60 Discount factor = = = 0.636  = 60 × 0.636 = 38.16 Total NPV of project = + + + + = (600) + 8.93 + 159.4 + 284.8 + 38.16 = (108.71) NPV of project <  CMI cannot get profit if they use this rate b) Project Discount Factor 12% 1.000 0.893 0.797 0.712 Table 4.2: The NPV from year to year Total NPV of project = + + + = (500) + 223.25 + 199.25 + 35.6 = (41.9) NPV of project <  CMI cannot get profit if they use this rate c) Project Cash Flow (£000) 30 Nguyễn Thị Kiều Anh - Snow - F05014 (700) 175 220 250 100 80 15 95 Table 4.3: The NPV from year to year Total NPV of project = + + + + + = (700) + 156.275 + 175.34 + 178 + 63.6 + 53.865 = (72.92) NPV of project <  CMI cannot get profit if they use this rate d) Project Cash Flow (£000) (400) 18 159 180 120 125 Table 4.4: The NPV from year to year Total NPV of project = + + + + = (400) + 16.074 + 126.723 + 128.16 + 79.5 = (49.543) NPV of project <  CMI cannot get profit if they use this rate Conclusion Based on the result from the tables above of projects, it is very easy to see that all projects also are not feasible because its NPV is negative Hence CMI should reject projects because they not bring profit for the company Internal Rate of Return (IRR) method a) Project The total profit over year is 31 Nguyễn Thị Kiều Anh - Snow - F05014 £ (10,000 + 200,000 + 400,000 + 50,000 + 10,000 - 600,000) = £70,000 An approximate IRR is therefore calculated as: A starting point is to try 7.8% Cash Flow (£000) (600) 10 200 400 50 10 60 Table 4.5: The NPV of project with r = 7.8% The table above shows that at r = 7.8%, NPV of project is negative with -54.92 Therefore, the project fails to earn 7.8% and IRR must be less than 7.8% Try r = 4.05% Cash Flow (£000) (600) 10 200 400 50 10 60 Table 4.6: The NPV of project with r = 4.05% At r = 4.05%, NPV > 0, 0.59 It means that project earn more than 4.05% and less than 7.8%  = a% + % = 4.05% + % = 4.09% approx 32 Nguyễn Thị Kiều Anh - Snow - F05014 When = 4.09%, we have NPV of project would be: Cash Flow (£000) (600) 10 200 400 50 10 60 Table 4.7: The NPV of project with r = 4.09%  The NPV of project at = 4.09% is positive and close to zero b) Project The total profit over year is £ (250,000 + 250,000 + 50,000 - 500,000) = £50,000 An approximate IRR is therefore calculated as: A starting point is to try 6.7% Discount Factor 6.7% 1.000 0.937 0.878 0.823 Table 4.8: The NPV of project with r = 6.7% The table above shows that at r = 6.7%, NPV of project is negative with -5.1 Therefore, the project fails to earn 6.7% and IRR must be less than 6.7% Try r = 4% Discount Factor 4% 1.000 0.961 0.924 0.889 Table 4.9: The NPV of project with r = 4% At r = 4%, NPV > 0, 15.7 It means that project earns more than 4% and less than 6.7% 33 Nguyễn Thị Kiều Anh - Snow - F05014  = a% + % = 4% + % = 6.04 % approx When = 6.04%, we have NPV of project would be: Discount Factor 6.04% 1.000 0.943 0.8893 0.8386 Table 4.10: The NPV of project with r = 6.04%  NPV of project at = 6.04% is positive and close to zero c) Project The total profit over year is £ (175,000 + 220,000 + 250,000 + 100,000 + 80,000 + 15,000 - 700,000) = £140,000 An approximate IRR is therefore calculated as: A starting point is to try 13.3% Cash Flow (£000) (700) 175 220 250 100 80 15 95 Table 4.11: The NPV of project with r = 13.3% The table above shows that at r = 13.3%, NPV of project is negative with -£90,475 Therefore, the project fails to earn 13.3% and IRR must be less than 13.3% Try r = 7.18% 34 Nguyễn Thị Kiều Anh - Snow - F05014 Cash Flow (£000) (700) 175 220 250 100 80 15 95 Table 4.12: The NPV of project with r = 7.18% At r = 7.18%, NPV > 0, 0.64 It means that project earn more than 7.18% and less than 13.3%  = a% + % = 7.18% + % = 7.22% approx When = 7.22%, we have NPV of project would be: Cash Flow (£000) (700) 175 220 250 100 80 15 95 Table 4.13: The NPV of project with r = 7.22% NPV of project at = 7.22% is positive and close to zero d) Project 35 Nguyễn Thị Kiều Anh - Snow - F05014 The total profit over year is £ (18,000 + 159,000 + 180,000 + 120,000 + 5,000 - 400,000) = £82,000 An approximate IRR is therefore calculated as: A starting point is to try 13.7% Cash Flow (£000) (400) 18 159 180 120 125 Table 4.14: The NPV of project with r = 13.7% The table above shows that at r = 13.7%, NPV of project is negative with -64.121 Therefore, the project fails to earn 13.7% and IRR must be less than 13.7% Try r = 6.7% Cash Flow (£000) (400) 18 159 180 120 125 Table 4.15: The NPV of project with r = 6.7% At r = 6.7%, NPV > 0, 1.108 It means that project earns more than 6.7% and less than 13.7%  = a% + % = 6.7% + % = 6.8% approx When = 6.8%, we have NPV of project would be: 36 Nguyễn Thị Kiều Anh - Snow - F05014 Cash Flow (£000) (400) 18 159 180 120 125 Table 4.16: The NPV of project with r = 6.8%  NPV of project at = 6.8% is positive and close to zero, 0.196 Conclusion: From results above, we can recognize that IRR of projects also positive and close to zero, however, all projects have IRR lower than cost of capital (12%)  All projects is rejected Explanation and recommendation Proje ct • Profit (£000) Investme nt (£000) 600 70 NPV (12%) (£000) (108.71) 500 50 (41.9) 700 140 (72.92) 400 82 (49.543) IR R (%) 4.0 6.0 7.2 6.8 According to the NPV Rule, the company should accept projects where the NPV is positive and reject where the NPV is negative If the company must choose between two, mutually-exclusive projects, the one with the higher NPV should be chosen • According to the IRR Rule, the company should accept those projects where the IRR is greater than the discount rate used (WACC) and reject those where the IRR is less than the discount rate An IRR greater than the WACC suggests that the project will more than repay the capital costs (opportunity costs) incurred (analysisnotes, n.d.) 37 Nguyễn Thị Kiều Anh - Snow - F05014 Based on NPV value, because all projects have negative NPV, however in case mutuallyexclusive projects, project have higher NPV  The Company should invest in project Based on IRR rule, all projects is rejected due to all project have IRR < 12% Because projects with very high IRRs relative to firm’s cost of capital are rare In most cases, reinvestment rate will be closer to cost of capital than to IRR and thus, NPV method is normally preferred to IRR method (slideshare, n.d.)  Project is assessed as the most feasible projects for investing CONCLUSION Business decision making is useful module It helps learners to understand deeply techniques and tools in forecasting sales, support company performance and evaluate feasibility of project Through this understanding, the learner can draw a conclusion for CMI Company as follows Firstly, the forecasting sales in year 2012, CMI should choose Proportional Model because it is the most reliable Secondly, Management Information System (MIS) is very important in support performance of each department such as sales and marketing department, finance and accounting department, production department, human resources department…Based on four level of management, namely: strategic-level systems, knowledge-level systems, management-level systems and operational-level system as well as several specific systems such as Executive Support System (ESS), Management Support Systems (DSS), Knowledge Work Systems (KWS), Office Automation Systems (OAS) and Transaction Processing Systems (TPS), CMI can perform effectively Thirdly, this report help CMI know the way to draw network diagram of project plan to know critical path and understand clearly the earliest time and the latest time to calculate float time and know exactly the number of personal is used in the project The last one in this report is about investment appraisal technique, by applying NPV, IRR, because the result is positive, so CMI should not invest in any project in given project 38 Nguyễn Thị Kiều Anh - Snow - F05014 APPENDIX Slide presentation Slide Slide Slide Slide 39 Nguyễn Thị Kiều Anh - Snow - F05014 Slide Slide Slide Slide Slide Slide 10 40 Nguyễn Thị Kiều Anh - Snow - F05014 Slide 11 REFERENCES alibaba (n.d.) Biometric Fingerprint Scanner for Staff Work Time Tracking and Door Access Control with GPRS KO-M10 Retrieved from http://www.alibaba.com/productgs/648521912/Biometric_Fingerprint_Scanner_for_Staff_Work.html analysisnotes (n.d.) NPV and IRR Retrieved from http://www.analystnotes.com/notes/los_detail.php?id=585 Anon (2010) Executive Support System Retrieved February 2010, from http://www.studymode.com/essays/Executive-Support-System-286707.html BPP Professional Education (2010) Business Decision Making 1st ed., London: BPP Professional Education Aldine House, Aldine Place BusinessDictionary (n.d.) Management support system (MSS) Retrieved from http://www.businessdictionary.com/definition/management-support-system-MSS.html businessstudies (n.d.) 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What Is the Purpose of an Accounting Department Within an Organization? Retrieved from http://smallbusiness.chron.com/purpose-accountingdepartment-within-organization-24374.html RobblieA (n.d.) Role of deparment Retrieved from http://www.slideshare.net/RobbieA/unit-3-role-of-functional-departments Rouse, M (2008) Peachtree Retrieved June 2008, from http://whatis.techtarget.com/definition/Peachtree slideshare (n.d.) Capital budgeting Retrieved from http://www.slideshare.net/infinite_7/case-studycapital-budgeting slideshare (n.d.) Project Plan Retrieved from http://www.slideshare.net/talk2metboy/managing-project-resources-presentation state (n.d.) QBSW Budget Retrieved from http://www.state-treasury.com/index.php? id=qbsw_budget-preparation0 42 [...]... 10 17 13 20 20 18 18 15 21 22 22 23 24 1 2 3 3 4 1 2 1 2 1 4 7 1 1 1 1 1 9 9 12 12 13 10 14 21 11 11 22 22 22 23 23 24 25 17 17 13 13 20 18 15 21 22 22 22 22 22 23 23 24 25 17 - 1 - 8 = 8 17 - 2 - 6 = 9 13 - 3 - 6 = 4 13 - 3 - 9 = 1 20 - 4 - 9 = 7 18 - 1 - 9 = 8 15 - 2 - 12 = 1 21 - 1 - 13 = 7 22 - 2 - 7 = 13 22 - 1 - 10 = 11 22 - 4 - 10 = 8 22 - 7 - 14 = 1 22 - 1 - 21 = 0 23 - 1 - 11 = 11 23 - 1 -... 4 + 1 + 1 + 1 + 1 + 1 = 18 4 + 4 + 0 + 3 + 2 + 7 + 1 + 1 + 1 = 23 4 + 4 + 0 + 4 + 1 + 1 + 1 + 1 + 1 = 17 4 + 2 + 15 + 1 + 1 + 1 + 1 = 25 4 + 2 + 1 + 2 + 1 + 1 + 1 = 12 4 + 4 + 1 + 1 + 1 + 1 + 1 + 1 = 14 4 + 4 + 1 + 1 + 4 + 1 + 1 + 1 = 17 4 + 2 + 2 + 1 + 1 + 1 + 1 + 1 = 13 4 + 2 + 2 + 1 + 4 + 1 + 1 + 1 = 16 4 + 2 + 3 + 2 + 7 + 1 + 1 + 1 = 21 Table 3 .1: The duration of the paths through the network The... F05 014 3 The earliest and latest event times Event Earliest time to start (in days) Latest time to finish (in days) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 0 0+4=4 0+4=4 4+2=6 4+2=6 4+4=8 4+4=8 4+5=9 6 +1= 7 8 +1= 9 9 + 3 = 12 9 + 4 = 13 9 + 1 = 10 10 + 1 = 11 12 + 2 = 14 6 + 15 = 21 21 + 1 = 22 22 + 1 = 23 23 + 1 = 24 24 + 1 = 25 4-4=0 6-2=4 10 - 5 = 5 21 - 15 = 6 13 - 3 = 10 17 - 1 = 16 13 ... SQUARES 12 Nguyễn Thị Kiều Anh - Snow - F05 014 Yea rs 200 6 200 7 200 8 200 9 2 01 0 2 01 1 Tot al Quarte rs 1 x y xy 0 500 0 0 2 1 350 350 1 3 4 2 3 250 400 500 1, 200 4 9 1 4 450 1, 800 16 2 5 350 1, 750 25 3 4 1 6 7 8 200 300 350 1, 200 2 ,10 0 2,800 36 49 64 2 3 4 9 10 11 200 15 0 400 1, 800 1, 500 4,400 81 100 12 1 1 12 550 6,600 14 4 2 13 350 4,550 16 9 3 4 14 15 250 550 3,500 8,250 19 6 225 1 16 550 8,800 256 2 17 ... 1 15 Earliest 4 4 9 8 6 8 6 7 21 Latest 5 4 10 10 6 16 10 20 21 Total 5-4-0 =1 4-4-0=0 10 - 5 - 4 = 1 10 - 4 - 4 = 2 6-2-4=0 16 - 4 - 4 = 8 10 - 2 - 4 = 4 20 - 1 - 6 = 13 21 - 15 - 6 = 0 Free 4-4-0=0 4-4-0=0 9-5-4=0 8-4-4=0 6-2-4=0 8-4-4=0 6-2-4=0 7 -1- 6=0 21 - 15 - 6 = 0 26 Nguyễn Thị Kiều Anh - Snow - F05 014 J K L M N O P Q R S T U V W X Y Z 8 6 6 9 9 9 12 13 7 10 10 14 21 11 22 23 24 16 10 10 10 10 ... - 7 - 14 = 1 22 - 1 - 21 = 0 23 - 1 - 11 = 11 23 - 1 - 22 = 0 24 - 1 - 23 = 0 25 - 1 - 24 = 0 9 -1- 8=0 9-2-6 =1 12 - 3 - 6 = 3 12 - 3 - 9 = 0 13 - 4 - 9 = 0 10 - 1- 9 = 0 14 - 2 - 12 = 0 21 - 1 - 13 = 7 11 - 2 - 7 = 2 11 - 1 - 10 = 0 22 - 4 - 10 = 8 22 - 7 - 14 = 1 22 - 1 - 21 = 0 23 - 1 - 11 = 11 23 - 1 - 22 = 0 24 - 1 - 23 = 0 25 - 1 - 24 = 0 Table 3.4: Total and free float time analysis From the table... Anh - Snow - F05 014 2008 2009 2 010 2 011 Total Average Adjustment to add up ~ total variation to 4 Final estimate of average quarterly variation 1. 3659 1. 4667 1. 2222 1. 3483 6.6663 1. 3333 0.7 619 0.8 615 0.8533 0.87 91 4.3928 0.8786 0.5000 0.5882 0.7000 1. 1636 1. 2754 1. 116 3 3 .10 62 0.6 212 5.7254 1. 14 51 3.9782 0.00545 0.00545 0.00545 0.00545 0.0 218 1. 33875 0.88405 0.62665 1. 15055 4 Table 1. 2.2: The summary... 400 6,800 289 3 18 350 6,300 324 4 19 600 3 61 1 20 750 2 21 500 3 22 400 11 ,40 0 15 ,00 0 10 ,50 0 8,800 4 23 650 529 276 9,800 14 ,95 0 12 4,8 50 400 4 41 484 4,324 250,00 0 12 2,50 0 62,500 16 0,00 0 202,50 0 12 2,50 0 40,000 90,000 12 2,50 0 40,000 22,500 16 0,00 0 302,50 0 12 2,50 0 62,500 302,50 0 302,50 0 16 0,00 0 12 2,50 0 360,00 0 562,50 0 250,00 0 16 0,00 0 422,50 0 4,525,0 00 Table 1. 3 .1: Applying least... to try 13 .7% Cash Flow (£000) (400) 18 15 9 18 0 12 0 5 12 5 Table 4 .14 : The NPV of project 4 with r = 13 .7% The table above shows that at r = 13 .7%, NPV of project 4 is negative with -64 .12 1 Therefore, the project 4 fails to earn 13 .7% and IRR must be less than 13 .7% Try r = 6.7% Cash Flow (£000) (400) 18 15 9 18 0 12 0 5 12 5 Table 4 .15 : The NPV of project 4 with r = 6.7% At r = 6.7%, NPV > 0, 1. 108 It means... 14 6 + 15 = 21 21 + 1 = 22 22 + 1 = 23 23 + 1 = 24 24 + 1 = 25 4-4=0 6-2=4 10 - 5 = 5 21 - 15 = 6 13 - 3 = 10 17 - 1 = 16 13 - 3 = 10 13 - 3 = 10 22 - 2 = 20 18 - 1 = 17 15 - 2 = 13 21 - 1 = 20 22 - 4 = 18 23 - 1 = 22 22 - 7 = 15 22 - 1 = 21 23 - 1 = 22 24 - 1 = 23 25 - 1 = 24 25 Table 3.2: The earliest and latest even times • Earliest start time (EST) - The EST of the activity is always zero - Calculate