Project management

The National Rail Network UK (NRN), is considering the project of the HS2 (High Speed Train 2nd phase).
The expected investment for it is £2.0 billion, out of which £0.5 billion have been spent on research that was
need to before undertaking the project.
Expert advisors to the NRN are estimating the annual revenues of £250million out of which wages will cost
£50million and materials £50million. Despite these costs the project net cash inflow over the next 10 years with
is expected to increase by 3% annually.
In order to stimulate the UK economy and boost investors’ confidence The Bank of England have set target
inflation rate at 2%.
The local councils of England have decided to fund the project on based on March 2020 USD LIBOR rate +
Due to the big debate made over the feasibility of the project the Government decide to
scrutinize the project and appointed you as an experienced financial manager to audit the project
1- Critically evaluate the role of financial manager within modern firms.
2- Calculate the NPV for the project.
3- Calculate the IRR of the Project using both interpolation and graph.
4- Calculate the Payback period and Discounted Payback.
5- Develop a sensitivity analysis scenario for the project.
6- Develop recommendation, on the feasibly of the project and what would be the major factors that would
result in its acceptance or rejection.
7- Critically evaluate the methods used in the project appraisal.
coursework Hints
Does the role of the financial manager differ from one industry to another?
What type of industry is the company mentioned in the assignment brief belong to?
What are the criteria to accept or reject any project? do some projects strategic importance give me an excuse
to try and find a way to accept certain projects?
When it comes to scenario analysis, you will need to look at the expectation of Boom, average and depression
(as an example) where are you going to get these figures from and why choose those not others? do all
industries in the UK share those figures or does each industry has its own prospects?
Can I link the advantages and disadvantages of appraisal methods to the industry being discussed?

Sample Solution