UNIVERSITY

ASSIGNMENT
below.
Your
answers
should
not
word,
be
from
copied,
the
word-fortextbook.
You
may
use
the
from
these
the
must
textbook,
be
written
but
as
expression.
your
own,
independent
Small
Industrial
Business.
purposes
accomplished
those
by
are
opportunity
studies?
Material
Factory
Supplies
Inputs
and
while
describing
characteristics
the
of
Raw
assessed
during
the
evaluation
production
of
processes.
various
types
of
production
processes?
are
used
for
What
obtaining
criteria
process
developing
particularly
countries,
for
small
industrial
business?
Marketing
briefly
Mix
mean?
the
function
marketing
of
vari9us
instruments.
Location
Describe
and
various
Site.
Input,
Output
locational
and
factors
other
for
assessing
project
feasibility.
Deadline
components
Investment
for
Cost?
Give
aof
Submission
Assignment:
brief
account
of
of
November
each.
10,
use
(P.I),
2015
of
Net
Profitability
Present
Value
Index
(NPV),
Return
Internal
Rate
of
an
analytical
techniques
project
appraisal.
used
in
replacing
a
computer
system
Purchase
with
price
aof
new
new
one.
1,000.00.
the
costs
cash
are
flow
Rs.
from
the
sale
old
be
CFAT,
Rs.
after
20,000.00.
the
the
installation
is
of
the
new
15,000.00
each
year
for
five
value
years.
at
the
The
end
Salvage
of
5
years
has
20,000.00.
proposal
of
Should
replacing
the
the
computer
the
be
accepted
on
criteria
discounted
@
12%.
Index
What
(P.I)
is
used
Profitability
as
criteria?
IRR,
NPVR
as
alternative
and
pay
back
perfect
criteria.
A
$
2.0
million
at
the
end
tenth
cost
(discount
year.
The
rate)
capital
of
the
estimated
to
be
10
%
period?
criterion,
would
your
accept
period
or
reject
decision
criterion,
would
you
as
in
get
(b)?
the
Why
same
or
Why
result
not?
Program
Project
Appraisal

PRESTON UNIVERSITY
EMBA/MBA/M.Sc. Program
DISTANCE LEARNING ASSIGNMENT
Project Appraisal
Quarter: Fall 2015, Deadline for Submission of Assignment: November 10,
2015
Attempt all questions given below. Your answers should not be copied, wordfor-word, from the textbook. You may use the
terms, concepts, examples from the textbook, but these must be written as
your own, independent expression.
Q.1 Describe the main characteristics of Small Industrial Business.
Q.2 What are four purposes those are accomplished by opportunity studies?
Q.3 Write a note on Material Inputs and Factory Supplies while describing the
characteristics of Raw
Materiel those should be assessed during the evaluation of various
production processes.
Q.4 What are different types of production processes? What criteria are used
for obtaining process
technologies in developing countries, particularly for small industrial
business?
Q.5 What does the term Marketing Mix mean? Describe briefly the function of
vari9us marketing
instruments.
Q.6 Differentiate between Location and Site. Describe various Input, Output
and other locational factors
those must be considered for assessing project feasibility.

Q.7 What are the components of Investment Cost? Give a brief account of
each.
Q.8 Explain briefly the use of Profitability Index (P.I), Net Present Value (NPV),
Internal Rate of Return
(IRR) and Pay back period as an analytical techniques used in project
appraisal.
Q.9 A firm is considering replacing a computer system with a new one.
Purchase price of new computer
is Rs. 80,000.00 and its installation costs are Rs. 1,000.00. the cash flow from
the sale of the old
computer is expected to be Rs. 20,000.00. the CFAT, after the installation of
the new computer is
expected to be Rs. 15,000.00 each year for five years. The Salvage value at
the end of 5 years has
been calculated as Rs. 20,000.00. Should the proposal of replacing the
computer be accepted on the
basis of NPV as a decision criteria discounted @ 12%. What is Profitability
Index (P.I) is used as
decision criteria?
Q.10 Discuss the role of IRR, NPVR and pay back period as alternative
Investment criteria. A perfect
requires an investment of $ 2.0 million at the end of tenth year. The capital
cost (discount rate) of the
project financing is estimated to be 10 %
a) What is the pay back period?
b) Using NPV as appraisal criterion, would your accept or reject the period
c) If IRR were used as decision criterion, would you get the same result as in
(b)? Why or Why
not?