Institute of Chartered Financial Analysts of India (ICFAI) University 2008 Certification Certified Financial Planner Portfolio management - Question Paper
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Project Management – II (MSF2E4): July 2008
part D : Case Study (50 Marks)
· This part consists of ques. with serial number one - 5.
· ans all ques..
· Marks are indicated against every ques..
· Do not spend more than 80 - 90 minutes on part D.
Case Study*
1. Prepare the projected profitability statement of Vasundhara Papers Ltd. (VPL) for the 1st 5 years of operations. ( 14 marks)
2. Prepare the projected cash flow statement of Vasundhara Papers Ltd. (VPL) from long-term funds point of view for the 1st five
years of operations. ( seven marks)
3. Appraise the project in terms of the following:
a. replaced NPV
b. replaced IRR
c. Discounted pay-back period
presume that the intermediate cash flows may be invested in government securities at the risk free rate. ( nine marks)
4. Financial institutions take holistic view of projects during their appraisal and try to satisfy themselves whether the deficiencies in
one area are covered up by the strengths in the other. They point out the weak points to the promoter and also suggest remedial
measures. explain the different aspects where the financial institutions contemplate for the appraisal of the project. ( 11 marks)
5. In projects, items to be procured are so complex that the project engineering department also cannot handle them separately.
Hence, procurement function is entrusted to procurement agents. discuss the process of procurement in a project. ( nine marks)
Industry Scenerio
The Indian paper industry is the 15th largest in the world and contributes Rs.25 billion to the government. The industry has recorded a
CAGR at a 5.5% in terms of quantity over the last three years. With the expected annual GDP growth rate of 7-8% for FY07, the paper sector
is also expected to record a similar growth rate. The 1st paper mill in India was set up at Sreerampur, West Bengal, in the year 1812. In
1951, there were 17 paper mills, and today there are about 515 units engaged in the manufacture of paper and paperboards and newsprint
in India.
The paper industry in India has been categorized into large-scale and small-scale. Those paper industries, which have capacity above
24,000 tonnes per annum are designated as large-scale paper industries. India is self-sufficient in manufacture of most varieties of paper
and paperboards. Import is confined only to certain specialty papers. To meet part of its raw material needs, the industry has to rely
on imported wood pulp and waste paper.
Paper is an essential commodity. India’s per capita consumption is currently eight kgs, compared to the global level of 52 kgs. World
paper demand growth is subdued and is ranging from 2-3 per cent, against India’s eight per cent. This high growth rate has been possible by a
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