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MAF 680
INTEGRATED CASE STUDY
Prepared by:
NUR ATIQAH PUSPA BT SARI
2011272756
AC 220 8K
Prepared for:
ASSOC. PROF. DR. MOHD ISMAIL RAMLI
EXECUTIVE SUMMARY
ATLAM is the maritime industry's diverse workforces establish on 15 TH August 1981
and become private on 1st January 1997. ATLAM is a subsidiary of Petra Group Companies.
Before 2001, ATLAM relied on a customised single-user system which only for recording
accounting entries purposes and facing deficit cash flow. End of year 2001, Zulkifli Osman,
Finance Manager of ATLAM has been responsible to organize new project on accounting
system. He has to choose whether he want to implement SAP or ACCPAC system. Key
Performance Index (KPI) setting is one of the most important aspects that private company
will focus on to improve and make huge changes to their company. We can clearly see that
EnZul is trying to make changes by implementing the SAP system which is parallel to the
parents (PETRA) system. However, argument arises between the project team. Lim, User
Representative did not agree with decision of EncikZul. Lim resist changing and making an
argument in term of cost and users acceptance.
Senior Manager of PETRA had been mentioned that the cost of implementing the
SAP in ATLAM was not the main concern. This is because we have the project sponsor
which is Faris. The reason he sponsored the project is because he want to promote the SAP
system to the ATLAM. It is good for ATLAM to accept the sponsor since they cannot afford
the expenses of implementing SAP system. There might be no sponsor in the future if
ATLAM did not implement the system now. In order to ensure the decision of implementing
SAP system is feasible, we need to evaluate and analyse the SAP system first.
In order to implement the SAP without wasting more time, encikZul terminate Lim in
this project. He should terminate Lim in this project because Lim might be whistleblower. Lim
might influence the staffs not to accept the new system if we not terminate him. In real world,
staffs have no power to reject what the upper level management asked to do. En.Zul has
acted bona fide in performing his jobs. He has the same objective with the company which is
to reduce the deficit of the company. EncikZul decision to terminate Lim is right to ensure
SAP could be implemented. Lim should accept the work since his position is below than
EncikZul.
PROBLEM STATEMENT
-
ALTERNATIVE SOLUTION
APPENDI
X
Year
Cash Flow
PVIF 10 %
Present Value
802,385.94
0.9091
729,449.05
1,273,766.71
0.8264
1,052,640.81
1,908,158.03
0.7513
1,433,599.13
2,044,904.3
0.6830
1,396,669.64
2,468,876.84
0.6209
1,532,925.63
2,866,994.71
0.5645
1,618,418.52
7,763,702.77
Year 1
Accountants time
Year 2
Year 3
Year 4
Year 5
Year
400,000
800,000
1,200,000
1,600,000
2,000,0
1,200,00
1,400,000
1,600,000
1,800,000
2,000,
500,000
900,000
1,200,000
1,500,000
1,800,0
1,200,00
1,500,000
1,500,000
1,500,000
1,500,0
7,300,
efficiency
Technical cost savings
600,000
0
Process & procedures
Working capital savings
900,000
0
TOTAL COST
1,500,00
3,300,0
4,600,00
5,500,00
6,400,00
SAVINGS
00
CASH OUTFLOW
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
150,000
200,000
225,000
250,000
250,000
100,000
160,000
180,000
560,000
600,000
640,000
300,000
420,000
490,000
560,000
600,000
640,000
Cost of overhead
Cost of system
60,000
120,000
130,000
140,000
150,000
160,000
260,000
300,000
340,000
380,000
400,000
800,000
900,000
1,000,000
1,100,000
1,300,00
Maintenance and
firewalls
Cost of hardware
Expansion
Cost of training
500,000
0
TOTAL COST
960,000
1,910,0
2,200,00
2,825,00
00
3,080,000
3,390,0
00
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
540,000
1,390,000
2,400,000
2,675,000
3,320,000
3,910,000
Depreciatio
1,477,092.
974,881.12
643,421.54
424,658.21
280,274.42
184,981.12
n cost
60
824,336.53
544,062.11
359,080.99
Earnings
before tax
and
depreciati
on
(34%)
Net Book
2,867,297.
1,892,416.
1,248,994.
Value after
28
75
Earnings
(937,092.
415,118.8
1,756,578
2,250,341
3,039,725
3,725,018
Before tax
60)
.46
.79
.58
.88
Tax rate
(262,385.9
116,233.29
491,841.97
630,095.7
851,123.16
1,043,005.
(28%)
3)
Earnings
(674,706.
after tax
67)
depreciatio
n
29
298,885.6
1,264,736
1,620,246
2,188,602
2,682,013
.49
.09
.42
.59
Depreciatio
1,477,092.
974,881.12
643,421.54
424,658.21
280,274.42
184,981.12
n reversal
60
After tax
802,385.9
1,273,766
1,908,158
2,044,904
2,468,876
2,866,994
cash flows
.71
.03
.3
.84
.71
The after-tax cash flows for the implementation of SAP is increase year
by year.
= NPV 1-0
Rate 1-Rate 2
27 IRR
27 29
27 IRR
-2
27 IRR
NPV 1 NPV 2
= 225,319.67 0
225,319.67 (- 16367.56)
= 225,319.67
241687.23
=0.9323
-2
27 IRR
IRR
IRR
=-1.8646
=27 + 1.8646
= 28.86 %
GANTT CHART