Read the Case Study: Pontrelli Recycling, Inc. in Ch. 7 of the Project Management and Accountingtext
Prepare no more than a 2,800-word Project Plan Overview of the Pontrelli case. Assume the high level cost estimate for the project is $8.8 million.
The focus of this assignment is to develop a plan to finance the $8.8M Pontrelli project.
Include the following:
- What are the strengths and weaknesses of debt and equity financing? Discuss possible sources of debt financing. Propose a strategy for Pontrelli to obtain project financing. Your submission must include one financing proposal that will be a mixture of debt and equity financing, and you must also include an alternative project financing proposal that can be used if the financial decision maker(s) were to not accept your first proposal.
- Compare and contrast EVA and MVA.
- Define WACC. How is WACC calculated? What are its strengths and weaknesses? Why is understanding WACC important?
- Calculate project viability, using the profitability index.
- Propose an alternate capital structure for Pontrelli. (This will be used if the financial decision maker rejects your first proposal.)
- Develop an alternate project budget. (This will be used if the financial decision maker rejects your first proposal.) What are the constraints?
- Create an alternate plan to manage the project budget. (This will be used if the financial decision maker rejects your first proposal.) Using Exhibit 7.8 as a template.
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