Capital budgeting project for Zain Telecom- Fiance
This is supposed work for which I selected ZAIN group to make capital budgeting. ZAIN is an improving mobile and data services operator in nations of Middle East and Africa. The total numbers of employees are more than 7000. It is one of most prominent and leading company in Kuwait.
Let suppose a manager of ZAIN group provided the information about 2 projects to CEO Mr. Scott Gegenheimer, who might invest in any one or two projects, if they will be beneficial. The 1st project is development of new innovative Data Centre. The 2nd project is about LiveSmart home project. Let’s call these projects Project A and Project B.
Let suppose a manager of ZAIN group provided the information about 2 projects to CEO Mr. Scott Gegenheimer, who might invest in any one or two projects, if they will be beneficial. The 1st project is development of new innovative Data Centre. The 2nd project is about LiveSmart home project. Let’s call these projects Project A and Project B.
Capital Budgeting
ZAIN telecom
Expected Cash flows from projects
Project A (Time value line)
Project B (Time value line)
Mutually exclusive projects
Independent projects
Risks inherent in projected cash flows to determine appropriate rate of return
Project Risk
Business Project Risk
Project evaluation through calculating Net Present value, Internal Rate of Return and Payback period
Net Present Value (NPV)
Project A
Project B
Conclusion
Internal Rate of Return (IRR)
Project A
Project B
Conclusion At the basis of IRR, the both project are beneficial as the rate is higher. If projects are mutually exclusive, than manager should select project A as it has higher rate of return. The chances of profitability are high in project A so company should select project A. Both projects are good and profitable for ZAIN group.
Payback Period (PB)
Conclusion
Discounted Payback (DBP)
For Project A
For Project B
Conclusion
Summary
References
ZAIN telecom
Expected Cash flows from projects
Project A (Time value line)
Project B (Time value line)
Mutually exclusive projects
Independent projects
Risks inherent in projected cash flows to determine appropriate rate of return
Project Risk
Business Project Risk
Project evaluation through calculating Net Present value, Internal Rate of Return and Payback period
Net Present Value (NPV)
Project A
Project B
Conclusion
Internal Rate of Return (IRR)
Project A
Project B
Conclusion At the basis of IRR, the both project are beneficial as the rate is higher. If projects are mutually exclusive, than manager should select project A as it has higher rate of return. The chances of profitability are high in project A so company should select project A. Both projects are good and profitable for ZAIN group.
Payback Period (PB)
Conclusion
Discounted Payback (DBP)
For Project A
For Project B
Conclusion
Summary
References
