1 / 21

Information System Project Management

การบริหารการเงิน และงบประมาณโครงการ Financial and Budget Management for Project Thanapat Pisutsin. Information System Project Management. What will we do tonight?. “Sharing our project experience ”. What will we do tonight?. “Sharing our project experience ”.

barth
Download Presentation

Information System Project Management

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. การบริหารการเงิน และงบประมาณโครงการ Financial and Budget Management for Project Thanapat Pisutsin Information SystemProject Management

  2. What will we do tonight? “Sharing our project experience”

  3. What will we do tonight? “Sharing our project experience”

  4. My Project Work Experience • “The study of Brand evaluation for Transport Co.,ltd.” • “Increasing the customer satisfaction for OSS, Ministry of Energy” • “The study of Marketing and Financial feasibility for King Power Complex” • “Satisfaction & Effect Evaluation of Motorway Route” • “The study of Distribution Center in Mukdahan as the effect of EWEC (East West Economic Corridor) Route • “The study of Expectation to Waste Water Management Authority” • “The Master Plan of Industry Estate in Northeastern Region” • Etc...

  5. What will we share tonight? • The experience about basic financial indicators for the project work. • Cost & budget control for the project.

  6. Why do we need to know about finance in the project? To help manager identify those projects that add value to the firm’s value… (The Financial Management: Theory and Practice; Eugene F. Brigham, Michael C.Ehrhardt) Most of the project are mutually exclusive projects.

  7. Project Classifications • Replacement Projects: maintenance of business, cost reduction • Expansion of existing products or markets • Expansion into new products or markets • Safety and/or environment projects • Research and Development • Long-term Contracts

  8. Capital Budgeting Decision Rules • Payback Period • Discounted Payback Period • NPV • IRR • Profitable Ratio (B/C Ratio)

  9. Definition of PV & FV PV = Present Value Present value is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk. Future value measures the nominal future sum of money that a given sum of money is "worth" at a specified time in the future assuming a certain interest rate; this value does not include corrections for inflation or other factors that affect the true value of money in the future. FV = Future Value

  10. Time Line and Value in the future ??? Baht 100 Baht 5% Year 1 2 3 4 5 0 Interest Rate at 5% per year What will be the value of 100 Baht in next 5 years?

  11. Time Line and Value in the present ??? Baht 100 Baht 5% Year 1 2 3 4 5 0 Discount Rate at 5% per year What is the present value of 100 Baht in year 5?

  12. Payback Period The expected number of years required to recover the original investment. Year 1 2 3 4 0 -1,000 500 100 400 300 -500 -100 200 300 -1,000 Payback Period = 2.33 years

  13. Discounted Payback Period Similar to regular payback period except that the expected cash flows are discounted by the project’s cost of capital. Year 1 2 3 4 0 -1,000 500 100 400 300 Discount at 10% -1,000 455 68 331 225 -545 -214 11 79 -1,000 Payback Period = 2.95 years

  14. NPV = Net Present Value Net present value (NPV)is one of standard methods for the financial appraisal for long-term projects. • Where • t - the time of the cash flow • n - the total time of the project • r - the discount rate • Ct - the net cash flow (the amount of cash) at time t. • C0 - the capital outlay at the beginning of the investment time ( t = 0 )

  15. NPV = Net Present Value The method that relies on discounted cash flow (DCR) techniques. C5 Baht C0 Baht C1 Baht C4 Baht C3 Baht C2 Baht r % Year 1 2 3 4 5 0 Discount Rate at r % per year

  16. IRR = Internal Rate of Return Internal Rate of Return (IRR) is the discount rate that equates the present value of a project’s expected cash inflows to the present value of the project’s cost. PV (Inflows) = PV (Investment Costs), Or, equivalently, The IRR is the rate that forces the NPV equal to zero Year 1 2 3 4 0 IRR Cash Flows -1,000 100 400 300 500

  17. Profitability Index (B/C Ratio) PV = PV of future cash flow/Initial cost or The present value of all inflow divided by the total initial cost at year 0 If B/C ratio > 1 , can invest But B/C ratio < 1, should not….

  18. Cost & budget control for the project. The method of financial management for the project which include loans, incomes, interests, taxes, expenses and others. Cost and budget control will also be included liquidity, cash flow, debt and assets. (Mostly use in construction project)

  19. Cost control will depend on…. • Estimation: By using historical data, survey data, experience judgment and risk/contingency. • Controlling:Updating cash flow table and Cost Centre account formB.O.Q documents (Bill of Quantity) • Variation Order(By negotiation skill or reducing the risk by using estimating plan)

  20. Financial Control for the project Estimating Budgeting Monitoring and Control

  21. Thank You Q & A

More Related