PROJECT APPRAISAL, PLANNING & CONTROL
Sub Code: 08MBAFM425 IA Marks: 50
No. of Lecture Hrs / Week: 04 Exam Hours: 3 Hours
Total no. of Lecture Hours: 56 Exam Marks: 100
MODULE 1 (4 Hours)
Planning & Analysis Overview: Phases of capital budgeting – Levels of
decision making – objective.
Resource Allocation Framework: Key criteria for allocation of resource –
elementary investment strategies – portfolio planning tools – strategic
position and action evaluation – aspects relating to conglomerate
diversification – interface between strategic planning and capital budgeting.
MODULE 2 (6 Hours)
Generation and screening of project ideas: Generation of ideas – monitoring
the environment – regulatory framework for projects – corporate appraisal –
preliminary screening – project rating index – sources of positive NPV –
qualities of a successful entrepreneur – the porter model for estimation of
profit potential of industries.
Market and demand analysis: Situational analysis and specification of
objectives – collection of secondary information – conduct of market survey
– characterization of the market – demand forecasting – market planning.
Technical analysis: Study of material inputs and utilities – manufacturing
process and technology – product mixes – plant capacity – location and site –
machinery and equipment – structures and civil works – project charts and
layouts – work schedule
MODULE 3 (12 Hours)
Financial Analysis: Estimation of cost of project and means of financing –
estimates of sales and production – cost of production – working capital
requirement and its financing – estimates of working results – breakeven
points – projected cash flow statement – projected balance sheet.
Project cash flows: Basic principles of measurement of cash flows –
components of the cash flow streams – viewing a project from different
points of view – definition of cash flows by financial institutions and
planning commission – biases in cash flow estimation.
Appraisal criteria: Net Present Value – benefit cost ratio – internal rate of
returns urgency – payback period – accounting rate of returns – investment
appraisal in practice.
Analysis of Risk.
MODULE 4 (10 Hours)
Types and measure of risk – simple estimation of risk – sensitivity analysis –
scenario analysis – montecarlo simulation – decision tree analysis – selection
of project – risk analysis in practice.
Special decision situations: Choice between mutually exclusive projects of
unequal life – optimal timing decision – determination of economic life –
inter-relationships between investment and financing aspects – inflation and
Analysis of firm and market risk: Portfolio theory and capital budgeting –
capital asset pricing model – estimation of key factors – CAPM and Capital
MODULE 5 (5 Hours)
Social Cost Benefit Analysis(SCBA): Rationale for SCBA – UNIDO
approach to SCBA – Little and Mirle approach to SCBA.
MODULE 6 (4 Hours)
Multiple projects and constraints: Constraints – methods of ranking –
mathematical programming approach – linear programming model –
Qualitative Analysis: Qualitative factors in capital budgeting – strategic
aspects – strategic planning and financial analysis – informational asymmetry
and capital budgeting – organizational considerations.
Environmental appraisal of projects: types and dimensions of a project –
meaning and scope of environment – Environment – Environmental
resources values – environmental impact assessment and environmental
MODULE 7 (5 Hours)
Project financing in India: Means of finance – norms and policies of financial
institutions – SEBI guidelines – Sample financing plans – structure of
financial institutions in India – schemes of assistance – term loans procedures
– project appraisal by financial institutions.
MODULE 8 (10 Hours)
Project Management: Forms of project organization – project planning –
project control – human aspects of project management – prerequisites for
successful project implementation.
Network techniques for project management – development of project
network – time estimation – determination of critical path – scheduling when
resources are limit – PERT and CPM models – Network cost system (Only
problems on resources allocation and resources leveling)
Project review and administrative aspects: Initial review – performance
evaluation – abandonment analysis – administrative aspects of capital
budgeting – evaluating the capital budgeting system of an organization.
1. Prasanna Chandra – Project Planning: Analysis, Selection,
Implementation and Review – TMH, 5/e
2. Narendra Singh – Project Management and Control – HPH , 2003
1. Nicholas – Project Management for Business and Technology:
Principles and Practice – Pearson / PHI
2. Gray & Larson – Project Management: The Managerial Process –
TMH, 3/e , 2005
3. Vasant Desai – Project Management – HPH
4. Bhavesh M Patel – Project Management – Vikas
5. Chitkara – Construction Project Management, Planning, Scheduling
and Control – TMH, 1/e
6. Choudhury – Project Management – TMH, 1/e
7. Project Management – K Nagarajan – New Age International, 2004
8. Project Management – Merdith & Gopalan – Wiley India (P) Ltd.
PROJECT APPRAISAL, PLANNING & CONTROL