3. Investment/project selection
• Make or buy decision.
• Outsourcing
• expansion of capacity.
• Product improvement/adaptation.
• Inventory management.
• Compliances with government regulations
4. Investment Finance
• Under this decision is taken about financing a
chosen investment project. The firm is
basically concerned in dealing with risks and
uncertainties.
• The firm has two sources of finance:
Internal
External
5. Funds allocation
• It is about taking decisions regarding
allocation of files into different investment
projects in the strategic setup
7. Meaning
• Project planning is a process of conceiving,
generating evaluating and selecting the most
profitable investment proposal project.
• It involves a plan for the investment of funds
8. Significance
• Capital expenditure nature have long-term
effects.
• Capital expenditure decisions are irreversible
• Huge amount of money is not involved in a
project.
• Helps in avoiding losses
• Helps in achieving control
• ensures optimal utilisation of resources
9. Difficulty of project planning
• Problem in measuring costs and benefits
• tangible benefits cannot be determined
• inflationary conditions
• lack of information
• budgetary limits
10. Stages of project planning
• Search new investment proposals
• project classification
• analysis of costs and benefits
• the measurement of investment worth
• feasibility study
• decision-making
• implementation
• performance review