Basic Element of An Investment Project: Management Study
It concerns how we do things? That is, how we manage resources that are available.
1. Concept. It refers to the administration executive business organization, administrative procedures, legal and environmental regulations.
2. Objetive of the study. Present the analytic procedures to deal in better shape the analysis of organizational, legal, administrative, fiscal, and ecological and economic consequences on the results of the evaluation.
3. Elements that integrate the management study.
a) Background. A brief overview of the origins of the company and a tentative outline of the organization that is considered necessary for the proper functioning of project management. Embodies the objectives of the company and its major shareholders.
b) Business Organization. It must present a plan of the institution showing your structure, direction and control functions for the proper functioning of the entity.
The jobs created must be to have their profiles and job analysis, to avoid confusion in the tasks assigned to each individual as well as detailing the responsibility of each of the posts.
c) Legal aspect. It must investigate all the laws that have direct or indirect interference in the daily operation of the company, whether the Labour Law, the Law of Income Tax and other laws that might affect its operation.
d) Ecological aspects .- Regulations concerning the prevention and control of water pollution, air and environmental impact.
e) Legal Framework. Within any activity in which you want to participate there are certain rules that must be followed to operate, which are mandatory and fair. The main ones are the following;
Market: • Health Legislation, • Contracts with suppliers and customers • Transportation of the product.
Location: • real estate securities, • environmental pollution • Support tax • Procedures diverse.
Technical study: • Technology transfer • Trademarks and patents • Fees and permits.
Management and organization: • Recruitment, Benefits • workers • Industrial safety.
Financial and accounting aspects: • Taxes • Financing.
Financial analysis and economic evaluation.
In this study we start playing with numbers, expenditures and revenues are projected at a given period, yielding an outcome on which the investor base its decision.
1. Concept. Seeks to determine which is the amount of financial resources to carry out the project, what the total cost for the operation of the plant (including the roles of production, administration and sales) and another set of indicators that serve as base for the final and definitive project, which is the economic evaluation. It is very important for decision-making, and that the information obtained should serve as the basis for the decision.
2. Objective:
• Demonstrate the economic viability of the project, • Demonstrate financial viability and provide the basis for economic evaluation.
3. Elements that compose it.
a) Identify, classify and schedule future investments in fixed assets and working capital deferred. The investments are indispensable resources for the installation of any company, regardless of your rotation. These capital investments are fixed, deferred or deferred asset investment and working capital of a project.
b) Joint program data production and sales made in market research, engineering and administrative, including production volumes and sales prices at alternative market, elements of the technical basis for the determination of production costs as well as investments to be made.
c) Formulate budgets • Sales or income and expenses • Costs of production, • Selling and administrative expenses; • Payments of principal and interest.
d) Prepare financial statements;
• Profit and Loss, Balance Sheet •, • Statement of changes in financial position on a cash basis.
4. Steps to prepare the financial study.
a) It must concentrate on the worksheet all the information, as are the different types of investments to be made, the costs of incorporation, operating, tax rates, loan rate, the performance demanded by the investor and the selling price of goods or services.
b) It develops a framework in which we obtain the surrender value of investments and the amount of annual depreciation or amortization for each of them.
c) Investment budget. You need to know and realize the various investments made during the lifetime of the project.
d) Production budget. They produce a cash flow based on previous data, to obtain cash from operations.
e) Cash flows. It produces a concentrate which make up a year the net flow of investment, operation for an algebraic sum and get the cash flows.
5. Steps to develop the economic evaluation.
1) With the previous flow has to get the NPV and IRR, taking into account the expected return for the investor.
2) Based on the results obtained are analyzed investment performance and risks in order to make a decision on firm foundations.
3) Submit the point of balance and financial statements referred to above.
credit to: Mr. Jose Luis Hernández Cabrera
Source: www.gestiopolis.com/finanzas-contaduria/elementos-de-un-proyecto-de-inversion.htm
image source: www.marketresearchlatinamerica.com/wp-content/consultores-estudio-de-mercados.jpg
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