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XYZ Company wants to set up a factory to manufacture new consumer goods with an investment budget of 450 million taka and projected 15% profit margins. The company received seven proposals to set up the factory ranging from 350-700 million taka in costs. Proposals were analyzed based on factors like costs, flexibility, maintenance requirements, and financial metrics like net present value and internal rate of return.

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89 views1 page

Assignment

XYZ Company wants to set up a factory to manufacture new consumer goods with an investment budget of 450 million taka and projected 15% profit margins. The company received seven proposals to set up the factory ranging from 350-700 million taka in costs. Proposals were analyzed based on factors like costs, flexibility, maintenance requirements, and financial metrics like net present value and internal rate of return.

Uploaded by

Mahabub Haider
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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American International University- Bangladesh School of Business Subject: Project Management Subject code: BBA-4120 Section: H Assignment: 01 Name:

ID: ------------------------------------------------------------------------------------------------------------------------------------------------XYZ Company wants to setup a factory to manufacture new type consumer goods. The company hardly can invest 450 million taka. Net profit margin is forecasted to 15% of the sales. The company wants an easy-to-handle and flexible factory, whose capacity can be increased further. The company invited proposal to setup factory and has got seven proposals. The proposals were analyzed and summarized below. Proposal No. Required investment (Tk. millions) 420 620 700 390 550 350 400 Cost of production Operations, maintenance and difficulties Labor requirement NPV IRR (%)

1 2 3 4 5 6 7

low competitive low competitive High competitive moderate

Easy to handle and maintain, and flexible Easy to handle and maintain, but not flexible Difficult to handle and maintain, and not flexible Easy to handle and maintain, and flexible Difficult to handle and maintain, but flexible Easy to handle and maintain, and flexible Easy to handle and maintain, and flexible

high Moderate low Moderate Moderate high moderate

6.2 6.35 1.5 8 10 -4.05 10

16 13 18 17 9 11 13

If interest rate is 13% and inflation rate is 2% then answer to the following questions. a)

b)

Which proposals can be rejected before financial analysis? Why? Which proposal will be feasible after financial analysis? Why?

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