Calculations1. Net present valueEstimated investment of the la
- 1. Calculations 1. Net present value Estimated investment of the lake house project is $40,000. After completion and once tenants move in, the expected returns from the lake house are $5,000, $8,000, and $10,000. The appropriate rate of return is 9%. Calculation of net present value is as follows: NPV= (5000÷(1+0.09)^1)+(8000÷(1+0.09)^2)+(10000÷(1+0.09)^3) - 40000 =4587.16+6733.44+7721.83 =$19,042.43 2. Pay back period Total project investment budget is $40,000 Annual cash flow is expected to be $10,000 Pay back period is 40000÷10000= 4 years 3. Cost benefit analysis Increase in revenue by 30% when new construction materials get sourced Payment of workers=$15000 Materials cost =$10000 Training =$5000 Total direct and indirectly costs are 15000+10000+5000=$30000 Increase in revenue can get estimated at $50000 The benefit-cost ratio produces 50000÷30000=1.66 The value is positive and there would be an increase in revenue. Thus purchase of new material would offer better outcomes. 4. Benefit-cost ratio (BCR) The lake house project gets conducted by leasing equipment for $10,000. The BCR shall be NPV÷cost of leasing 19042.43÷10000=1.904 The positive value of BCR indicates that the benefits are far much better than internal costs.
- 2. Rationale for Recommendations Calculation of NPV is an initial factor required to determine how the project would be viable in the future. Thelake house project shall involve different cnstructors and equipment selected for different stages in the project. As such, the proper method of understanding the lake project's capability of generating profits requires the NPV. NPV gets used as an analysis tool to implement effective capital budgeting processes for the project getting studied (Jagerson, 2021). Since the final calculation indicated that the NPV was a positive value, it was thus easy to finalize the idea that the project’s viability would get guaranteed. Having positive and reliable cash flows in the project is an effective method of handling the project’s improvement as it indicates how the project correlates with different goals. Running head: RISK ANALYSIS & PERFORMANCE ANALYSIS 1 RISK ANALYSIS & PERFORMANCE ANALYSIS 2 Risk Analysis & Performance Analysis By Herbert Greene Dr. Cuffe August 22, 2021
- 3. Formal Letter to the Instructor Herbert Greene Antietam Dr Locust Grove, VA (Dr. Cuffe), Designation Dear Sir, I am writing this your way to explain the risks associated with the proposed project. As I have updated you regarding the project's objective that is divided into six milestones, and in each milestone, there are direct or indirect risks associated. The project involves constructing a lake house project that will be constructed on 500*500 feet of land, including interior and exterior features of the construction project. We will be executing the project after finalizing the planning and development of resources through collaboration with stakeholders. I have also shared milestones for the task and the sequence used to achieve each task. The purpose of this letter is to inform you about risks that might be confronted during project processes and affect expected outcomes. Several risks that might occur during project process includes lack of enough time, lack of capital, and insufficient human resource. These three risks are expected and would imply greater influence over
- 4. the completion of the project. The assessment and management of these risks are crucial to avoid challenges throughout the project process. Shortage of capital is one of the biggest risks, and its impact would be higher than the rest of the two. One of the biggest costs associated with each risk would be a delay in completing the project process and a waste of available construction material. Because the project completion will be delayed, available construction material would waste and put an extra financial burden on stakeholders. The human resource department and internal stakeholders of the organization are responsible for tackling these risks. For example, the shortage of capital would be managed by the collaboration of stakeholders (Banaitiene & Banaitis, 2012). Similarly, the shortage of human capital and time would be managed by the human resource management department. I have prepared a risk response for all these three risks that would be helpful to manage and avoid complications throughout the project process. By using qualitative and quantitative measures, the adjustment of associated risks are as follows; Likelihood Higher Slight Lower No Impact at All Shortage of Capital
- 5. Shortage of Human Resource Shortage of Time Risk The above table shows the frequency of occurrence of each risk that also indicates the impact it would imply over the whole project. Shortage of capital and time is highly effective in terms of impacts and costs associated with these risks. Effective planning of each task and hiring an additional workforce is the solution to manage the scheduled time for the project. Some tasks of the project would be outsourced to ensure that the project is completed on time. And the risk response for the shortage of capital will be to ensure that we would have alternative means to meet the crossing needs of capital. Part 2: After the assessment of risks and execution of the project, the further step is to track the performance of the project. The tool used to track project performance and evaluate whether or not everything is on track is a regular assessment of each task, using an outline of the project that we made at the start to track whether or not everything is going well. Regular assessment means weekly meetings would be arranged in which each member of the project team will participate to share the performance of each task. Every week, every member will share their progress, use the budget, time, constraints that they are
- 6. facing, and expected outcomes to figure out project performance and make recommendations. In weekly meetings, along with discussing the previous week's performance, a schedule for the upcoming week would also be discussed that would be helpful to keep track of project performance and measure whether the project will complete within the stated time and budget. I would also like to add that the project will take one year because it is a complex construction project; thus, the approximated time is one year. All six milestones will be achieved one by one throughout the year. Yours Sincerely, Project Manager References Banaitiene, N., & Banaitis, A. (2012). Risk Management in Construction Projects. DOI: 10.5772/51460. 2 Lake House Project Part 5
- 7. Herbert Greene Week 5 Assignment Dr. Cuffe August 23, 2021 Part 1 Resource Costing Cost estimates include the cost and assumptions underlying each cost. The assumptions cover all the cost inclusions and exclusions which are important for the project stakeholders to interpret project costs and to understand how and where actual cost might differ from approximated costs. In this section we are concentrating on labor cost. This is the cost of human effort expended towards project objectives. The method to use for cost estimate is the preliminary estimates. This will use detailed scope information to incorporate unit cost. The work breakdown has been prepared together with the project Gantt chart. This is important in the cost estimation part. The table below shows the human resource that will be used in the project that include the person, position title and pay rate. The workers will be required to work for 40 hours a week from Monday to Friday where there will be no overtime awarded. Person Name Position Pay rate per hour James Robert Project Manager (PM) $55 Grace Addison General Contractor (GC) $100 Simon Kant Site Excavation contractor (SEC) $ 65 Mercy Willow Electric contractor (EC)
- 8. $ 65 Boniface Hamid Plumbing contractor (PC) $ 65 Peter Jonathan Concrete contractor (CC) $ 65 Wilson Alan Framing contractor (FC) $ 65 Stanley Kay Roofing contractor (RC) $ 75 Jeremiah Buster Masonry contractor (MC) $ 50 Hannah Aubrey HVAC contractor (HC) $ 75 Keats John Insulation contractor (IC) $ 65 Charles Keillor Painting contractor (PAC) $ 50 Kelly Walt Finish carpentry contractor (FCC) $ 50 Alex Kennan Flooring contractor (FLC) $ 50 Kepa Robert Fencing contractor (FEC) $ 50 Kesey John Landscape contractor (LC)
- 9. $ 65 Table 1showing human resource data sheet in the project The resource loading list consists of the task, the resource assigned and the percent of time allocated for each task. Task Planning and estimates development 20% PM 35% GC Permits acquiring 65% PM Clear and grub lot 85% SEC Install temporary power 85% EC 5% PC Install underground utilities
- 10. 35% EC 20% PC Excavation for foundation 75% SEC Erect basement walls 55% CC Backfill foundation 75% SEC Framing work 80% FC Exterior finishing 35% MC
- 11. 20% FC Utility installation 20% PC 10% EC 5% HC Interior finishing 10% IC 35% PAC 20% FCC 15% PC 20% EC 5% HC Flooring, carpeting and tiles 45% FLC Landscaping and ground works 5% CC 10% FEC 20% LC Table 2showing resource loading list Formal letter to the Supervisor
- 12. Herbert Greene Antietam Dr Locust Grove, VA (Dr. Cuffee), Designation Dear Sir I hereby write to inform on the project resource allocation and costing for the project. The project resources will consist construction materials, human labor and construction equipment. Application timeline for the material will go hand- in-hand as the Gantt chart where the activities will be scheduled and time allocation for each resource stated. The resource allocation has been done using preliminary estimates where each activity has been considered separately. The Gantt chart shows all the project activities where from previous experience and the house size the architect was able to provide an estimate of the required resources. This have been compared to the resources used in similar projects conducted in the area to increase accuracy. The ground condition from study and observation has good stable foundation soil which will favor the construction and reduce foundation in terms of cost and time. The area has good infrastructure in terms of roads where the required materials and equipment will access the site with ease. The site construction has also come at a favorable time with conducive w eather with no rains except for the high temperature which will affect workers productivity. The foundation will require more of excavation contractor for excavating and backfilling where the concrete contractor will come in to erect the walls. The plumbing contractor will also lay the foundation plumbing work. The ground floor will follow together with the building columns as per the design. This part requires many temporary laborers under the masonry and concrete contractors as it is labor intensive. The general contractor’s work here is supervision and inspection. The laborers for this section will be obtained from
- 13. the area who will be hired and paid weekly. To ensure smooth flow of work the workers will be required to guarantee availability for the whole week and in case of absence to report one day earlier. The roofing, exterior and interior finish will then be done as per the work schedule. This will involve the roofing contractor for the roofing work while for the finishes, the painting, HVAC, carpentry, electrical and plumbing contractor will be involved. The general contractor will ensure quality of work is maintained and all the resources are used correctly. The resource cost list and the resource loading list have been provided. Yours sincerely (Student Name), Project Manager Small Lake Cabin Project Small Lake Cabin Project Herbert J Greene Week 2 Assignment Dr. Cuffee July 28, 2021
- 14. Herbert Greene Locust Grove, Virginia. 27 July 2021 Dr. Cuffee Supervisor Dear Dr., Cuffee, I am writing about the Lake project deliverable required for the semester. The contents of this letter are effective in understanding how the lake project shall get conducted and how the financial calculations involved. Since I am fronting most of the money this is what the calculations on what will be needed to complete the project. Calculations 1. Net present value Estimated investment of the lake house project is $40,000. After completion and once tenants move in, the expected returns from the lake house are $5,000, $8,000, and $10,000. The appropriate
- 15. rate of return is 9%. Calculation of net present value is as follows: NPV= (5000÷ (1+0.09) ^1) +(8000÷ (1+0.09) ^2) +(10000÷ (1+0.09) ^3)-40000 =4587.16+6733.44+7721.83 =$19,042.43 2. Pay back period Total project investment budget is $40,000 Annual cash flow is expected to be $10,000 Pay back period is 40000÷10000= 4 years 3. Cost benefit analysis Increase in revenue by 30% when new construction materials get sourced Payment of workers=$15000 Materials cost =$10000 Training =$5000 Total direct and indirectly costs are 15000+10000+5000=$30000 Increase in revenue can get estimated at $50000 The benefit-cost ratio produces 50000÷30000=1.66 The value is positive and there would be an increase in revenue. Thus, purchase of new material would offer better outcomes. 4. Benefit-cost ratio (BCR) The lake house project gets conducted by leasing equipment for $10,000. The BCR shall be NPV÷cost of leasing 19042.43÷10000=1.904 The positive value of BCR indicates that the benefits are far much better than internal costs. Rationale for Recommendations Calculation of NPV is an initial factor required to determine how the project would be viable in the future. Thelake house project shall involve different cnstructors and equipment selected for different stages in the project. As such, the proper method of understanding the lake project's capability of generating profits requires the NPV. NPV gets used as an analysis tool to implement effective capital budgeting processes
- 16. for the project getting studied (Jagerson, 2021). Since the final calculation indicated that the NPV was a positive value, it was thus easy to finalize the idea that the project’s viability would get guaranteed. Having positive and reliable cash flows in the project is an effective method of handling the project’s improvement as it indicates how the project correlates with different goals. Assessment of the payback period is a suitable method to handle the project’s completion. This is majored on the fact that a breakeven point gets reached once the project's activities get conducted in a rewuired way. It is possible to rely on the lake project’s payback period assessment that generates clear directions for participants t submit all deliverables on time. The cost benefit analysis process offered a positive value indicating positive viability of the project’s activities. It was possible to perform the assessment and determining how the lake project would operations with different equipment. Application of the benefit cost ratio further offered better understanding of how the project would work in future. Since there are different direct and indirect costs for the project’s operations it would be imperative to implement the BCR analysis. The technique determines value of money used to handle the project’s activities (Hayes, 2020). The lake projects value was greater than one indicating a possibility of generating positive revenue. After assessing all calculations, it was clear that improvement of thelake project would be possible by using diverse valid calculations to increase productivity. I believe the contents of this letter shall provide understanding of the lake project’s deliverables. Yours sincerely, Herbert Greene .
- 17. References Hayes, A. (2020). Benefit-Cost Ratio. Retrieved 26 July 2021 from https://www.investopedia.com/terms/b/bcr.asp Jagerson, J. (2021). What is the formula for Calculating Net Present Value? Retrieved 26 July 2021 from https://www.investopedia.com/ask/answers/032615/wha t- formula-calculating-net-present-value-npv.asp 8 Lake House Project Part 1 & 2 Herbert Greene Week 3 Assignment Dr. Cuffee August 3, 2021
- 18. PART 1 Project Scope Project Objective The project involves construction of a lake house proj ect whereby assorted size rental units will be constructed on a 500*500 feet piece of land that is part of my investment for the project apart from the fronted investment fund. The rental units are projected to have a return of $5,000, $8,000 and $10,000. This project is supposed to provide a viable investment opportunity as a real estate venture by providing executive housing solution to the growing population in Denver. Project Deliverables The project Deliverables include 6 mansionettes fully built with both standard interior and exterior features. Milestones · Mobilization of onsite requirements installations · Laying of foundation · Concrete Forming and Pouring - Floors and Roof · Masonry work · Roofing · Installing finishes · Plumbing · Electrical · Heating and ventilating · Complete final Inspection Technical Requirements · Electricals · Heating and ventilating equipment · Logistics Project Constraints Lack of enough time to complete milestones. Since the project works on estimated time, the project is exposed to the risk of falling behind schedule if one phase of the projects slacks.
- 19. Lack of enough capital. Since funding will mainly come from different stakeholders, reliance on them as a source of funding exposes the project to delays when a stakeholder fails behind in their payments. Insufficient human resource. The project is a labour intensive project thus having reliable skilled and non-skilled workers will be paramount in making sure the project does not stall. Ethical and Social Responsibility considerations Reduction in carbon footprints through the use of solar energy and biogas as the main source of lighting and heating for the houses. 85% of supplies for the project, including labor and construction materials will mainly come from established manufacturers or suppliers from the Denver locality as a mode of benefiting the local environment. The Lake housing will also prioritize the needs of local citizens concerning the project, for example effect of the project on social integration during the planning phase of the project. Customer review (Enter Instructor’s feedback) PART 2
- 20. Formal Letter to the Instructor Herbert Greene Antietam Dr Locust Grove, VA (Dr. Cuffee), Designation Dear Sir I hereby write to provide a general overview of the Work Breakdown Structure for the Lake House Project (LHP). The project will mainly involve four resources including General contractor, Architect, Owner, & Mortgage lender. The project will start immediately after the finalization of plans and development of estimates among the management and external stakeholders. This will be followed by the application of necessary from authorities responsible in Denver including HVAC permit. The provision will be followed by the site work for preparation of the main construction site. This involves clearing and grubbing the unnecessary lot and installing ground and power service. Accomplishment of this step will be an important process in supporting establishment of the main foundation for the housing units including excavating and laying foundation for basement walls. This notion will be followed by framing and Dry In. The exterior walls finishing will be the next step which will be done concurrently with the plumbing and interior finishing. The last stage will involve landscaping and ground works which involves installing backyard fences and establishing concrete driveways and sidewalks. Finally, the project manager will evaluate and submit a final report on the project whereby the deliverables will be assessed for their quality. Attached is a Gantt Chart providing a visualization of the WBS including the critical paths for the project. Yours sincerely (Student Name), Project Manager Gantt Chart