Question 1PMS is planning for next year’s operations and growth. The management is considering which projects to implement. Assuming you are the Operations Manager. Mr. Chua has asked you to evaluate the following projects: i. Project A: Implement customer self-checkout system at the supermarkets. ii. Project B: Implement crowd control system for efficient evacuation in the event of fire, as required by the Civil Defence Force. iii. Project C: Set up a fish farm at Changi Sea. iv. Project D: Implement an online store. v. Project E: Expand the warehouse at Tuas. vi. Project F: Implement PMS Member Card by tying up with SingaBank’s Credit Card Service. Classify each project into Compliance, Strategic or Operational category. You must explain the reason for each classification by envisaging what the project can do for PMS. (12 marks)BUS353e Assignment 2SIM UNIVERSITY Assignment 2 – Page 5 of 9Question 2There are several ways to assess the viability of and to rank the projects. You have decided to use a variety of methods.(a) The CEO is interested in the Payback Period for the projects. You shall start with Projects A and B using this method of analysis.After weighing against the cost of not implementing the projects, Project A will cost PMS $150,000 and generate an annual net cash flow of $45,000, whereas Project B will cost $50,000 and generate an annual net cash flow of $12,000.(i) Evaluate the payback period (in years) and the rate of return (in percent) of each project. Based on this analysis, determine the choice of Project A or B. (5 marks)(ii) Discuss whether PMS shall choose Project A or B based on other criteria apart from the payback period. Provide two (2) reasons for your choice. (2 marks)(b) PMS’s management is interested in the Net Present Values for Projects C and D. The cash inflow and outflow are shown in Table 1. You are to evaluate the missing values in the table.
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