Discounted Cash Flow Analysis

Published Date: 02 Nov 2017

Introduction

AnniNaga PVt.

AnniNaga was first set up by S.V.Murugesh over 07 years ago. Today fresh fruits, vegetables, dairy products, groceries, meats, fresh and frozen cuts of up to test household products and drugs, a 50 000, satisfied and loyal customers worked.

However AnniNaga in synonymous with its "Food City" super markets. It currently has 03 branches. Jaffna, KKS Road supermarket is a supermarket. AnniNaga 2004 founded the first branch was. A turnover of 300 000 rupees a day for this branch and that AnniNaga it currently exists.

Increased customer point of sale transaction AnniNaga KKS road is a problem of inefficiency is increasing. Integration time for things to be done manually. This led to long lines and customer dissatisfaction. Are still low and the cashier made a mistake in data entry? There is an urgent need for the remodeling process.

SWOT analysis

Strength

Protected by the sole distribution agreements, exclusive brands

Successful relationship marketing and customers

Innovative sales methods

Provides a solution to the demands of the future with the company

Weak

By an expansion of the small size and inability to store, stocking a limited range of products, as a result of

Name is not well known

The manager of a limited amount of industry experience and knowledge of industry

All function are doing manually (inventory, customer details, etc)

Opportunities

To be directly imported to include the reverse supply chain integration

Increased geographic coverage

Leverage the Internet to enhance business development

Threats

Consumer interest in our product range may vary with changing fashion trends

Costs, the effect of exchange rate variation on

Putting pressure on our margins on the CPI was raising rents

Above the swot analysis we come to conclusion. the AnniNaga food city must have publish their name and logo. and they must to do the computer based projects, that projects are inventory control system, human resource management system and web based system. (Magazene, 1997-2009)

Task-02

AnniNaga food city food city need to 2 project those are

1. Inventory control system

2. Web page creation

They need web page creation, one of their weakness is their name is not well known, but immediately need to Inventory control system. Because they are newly opened so their main aim is profit and invest more money in the food city. If they provide good customer services they get more valuable customer and get more profit.

Discounted cash flow analysis

DCF Analysis considers the time value of money, based on the premise that people prefer to receive goods and services now rather than later and investors prefer to receive money today rather than the same amount in future. an investor demands rate of return even for a risk less investment as a reward for delayed payment. AnniNaga food city invested more money, but food city's weakness is manual function. First they change their manual system to computer system. So they must need to Inventory control system. Advantages of this system are maintaining the customer details, reduce the customer's Inconvenience, and at a time handle the many customers. In this DFC more consider about money and time, web page creation is not regular income project this is a one of long term project. Inventory control system is one of regular income system and must needed one so I select this inventory control system. Above reason attract the customers easily, increase their business and future food city earn more profit. In this DFC more consider about money and time, web page creation is not regular income project this is a one of long term project. Inventory control system is one of regular income system and must needed one so I select this inventory control system. (commity, 2008)

Payback period analysis

Another method to estimate the recovery of the investment project. It focuses on the recovery during the recovery process. It generates cash receipts during the early recovery of its costs out of the back yard for a project will take a long time. This period is sometimes referred to as "which will take the time to pay for the investment." Investment cost recovery method to obtain the evidence more quickly, meaning that more investment is needed. Expressed during the years of recovery.

Food city needs to IT Project. The Food city is considering two projects. Inventory control system and web page creation. Inventory control system costs 250,000 and will reduce maintaining cost by 25,000 per year. Web page creation cost by 300,000 but will also reduce Maintaining costs by 25,000 per year.

Calculation:

Inventory control system payback period = 250,000 / 25,000 = 10 years

Web page creation system payback period = 300,000 / 25,000 = 12 years

Food city SWOT analysis says companies’ customer satisfaction and Profit with sort term (newly in Experience Company) so the payback method is not a true measure of the profitability of an investment. Rather, it simply tells the Food city owner how many years will be required to recover the original investment. Unfortunately, a shorter payback period does not always mean that one investment is more desirable than another. I’m a project manager I provide Inventory control system because this is short term profit compare with web page creation project. (Management, 2011)

I consider about non financial

Stakeholders (customers)

Competitors

Employees (IT department)

customers don't want time delay so mainly they want to easy to access the wanted things

All the competitors use the inventory control system so they easily attract the customers..

Webpage creation project is must to need many IT department employees because regular updating and etc, but Inventory control system don't need much staff so this is not affect the companies salary budget . Above the non financial reason I select the inventory control system

Selection

Above the financial and non-financial analysis says Inventory control system is better for company’s growth, profit, customer attraction and customers compare with webpage creation.

Task-03

Positive or negative impact on the effect of the action or proposed action or cause any person, group or organization who

 

• Project manager. This person is responsible for project management.

• Customer. Refers to a person or organization can be used for the production of this project.

• Performing organization. Their employees are directly involved in working on this project refers to the Enterprise.

• Project team members. This project work is a group of tasks.

• Project management team. This is directly involved in project management activities, the project team members.

• Sponsor. Financial resources for the project in cash or in kind provided the person or group.

• Influencers. People buy the product or use, or directly related to the project, but due to the location of the user is not an individual company or organization, performing groups, positively or negatively, affect the course of the project.

Planning

Select & Define

Identify key stakeholders

Select & implement tool

Collect Information

Stakeholder Matrix

Analyze stakeholder matrix

Monitor & improve

Expectation

Figure

Stakeholder Matrix

Figure

Keep

Satisfied

Manage

Closely

Monitor

(Minimum effort)

Keep Informed

Low

Power

High

Interest

High

Stakeholder

Stake in the project

Potential impact on Project

What does the Project expect the Stakeholder to provide?

Perceived attitudes and/or risks

Stakeholder Management Strategy

Responsibility

Food city Director

Policy and process owner who determines institutional administrative policy and procedures

High

Experienced staff to be involved in user group and user acceptance testing.

Commitment to implementing change.

Lack of clarity about preferred approach.

Views project team as too technically oriented.

Involvement in Project Steering Board, Regular updating meeting with project leader.

Project Manager

Manager of Food city

Manages Food city admin staff who will operate the new system at local level and admin staff who will indirectly input and directly extract data

Medium

Commitment to implementing change.

Lack of interest in project.

Involvement in briefing sessions at quarterly School meetings.

Director and Project Sponsor

Admin Staff

Will operate new system

High

Contribute to system and process design and testing.

Concern about increased workload.

Worried about what training they will receive.

Involvement in user groups.

Project Team

(rhifat, 2010) (infonet)

Table

Project Organization Chart

Figure