project finance assignment

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Project Finance Assignment

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Project finance lecture notes for the year 2021

Business finance (acf 361), kwame nkrumah university of science and technology.

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Preview text, course outline.

1. Project Finance

a to Project Finance.

b Structure and Participants

c. Sources of Financing Projects

d. Credit Agreements

e. Financial Modeling

f. Financial Modeling g. Sources of Capital h. Legal Aspects in Project Finance

• Feasibility Studies.

a. Introduction to Feasibility Studies

b. Feasibility Study Elements

c .Diagnosing, Assessment and Evaluation of Feasibility

d. Accounting Methods and Financial Models of Feasibility

e. Report Preparation of Feasibility Study

Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors.

Project finance is generally used to refer to a non-recourse or limited recourse financing structure in which debt, equity and credit enhancement are combined for the construction and operation, or the refinancing, of a particular facility in a capital-intensive industry.

Credit appraisals and debt terms are typically based on project cash flow forecasts as opposed to the creditworthiness of the sponsors and the actual value of the project assets. Forecasting is therefore at the heart of project financing techniques. Project financing, together with the equity from the project sponsors, must be enough to cover all the costs related to the development of the project as well as working capital needs.

The Export-Import Bank of the United States defines project finance as:“.. financing of projects that are dependent on project cash flows for repayment, as defined by the contractual relationships within each project. By their very nature, these types of projects rely on a large number of integrated contractual arrangements for successful completion and operation. The contractual relationships must be balanced with risks distributed to those parties best able to undertake them, and should reflect a fair allocation of risk and reward. All project contracts must fit together seamlessly to allocate risks in a manner which ensures the financial viability and success of the project.”

The rating agency Standard & Poor’s also defines it as: “..-recourse financing of a single asset or portfolio of assets where the lenders can look only to those specific assets to generate the flow needed to service its fixed obligations, chief of which are interest payments and repayments of principal. Lenders’ security and collateral is usually solely the project’s contracts and physical assets. Lenders typically do not have recourse to the project’s owner, and often, through the project’s legal structure, project lenders are shielded from a project owner’s financial troubles.

Project-finance transactions typically are comprised of a group of agreements and contracts between lenders, project sponsors, and other interested parties who combine to create a form of business organization that will issue a finite amount of debt on inception, and will operate in a focused line of business over a finite period.”-

An ‘official’ definition of project finance was provided by the Basel Committee on Banking Supervision in the context of the ‘Basel II’ rules : “Project finance is a method of funding in which the lender looks primarily to the revenues generated by a single project, both as the source of repayment and as security for the exposure. This type of financing is usually for large, complex and expensive installations that might include, for example, power plants, chemical processing plants, mines, transportation infrastructure, environment, and telecommunications infrastructure..

The Organization for Economic Cooperation and Development (OECD) provides another‘official’ definition of project finance: The financing of a particular economic unit in which a lender is satisfied to consider the cash flows and earnings of that economic unit as the source of funds from which a loan will be repaid and to the assets of the economic unit as collateral for the loan.

Generally, a special purpose entity is created for each project, thereby shielding other assets owned by a project sponsor from the detrimental effects of a project failure. As a special purpose entity, the project company has no assets other than the project. Capital contribution commitments by the owners of the project company are sometimes necessary to ensure that the project is financially sound or to assure the lenders of the sponsors' commitment. Project finance is often more complicated than alternative financing methods. Traditionally, project financing has been most commonly used in the extractive (mining), transportation,telecommunications, and power industries, as well as for sports and entertainment venues.

Uses for project finance.

Project finance techniques have enabled projects to be built in markets using private capital. These private finance techniques are a key element in scaling back government financing, a central pillar of the current ideological agenda whose goals are well articulated by Grover Norquist,a US Republican ideologue and lobbyist, who says ‘I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.’ On the basis of such ideological agendas and lobbyists’ machinations are the macroeconomic policies, upon which project finance feeds, made, thus transferring the control of public services from the electorate to private, unaccountable and uncoordinated interests.

Such agendas make project financing a key method of using private capital to achieve private ownership of public services such as energy, transportation and other infrastructure development initiatives. The goal ultimately is to make government irrelevant and achieve a two-tier society where government panders to the marginalized and infrastructure development and exploitation are handed over to private capital, free from the encumbrances of electoral mandates. Some of these sectors include:

■ Energy: Project finance is used to build energy infrastructure in industrialized countries as well as in emerging markets.

■ Oil: Development of new pipelines and refineries are also successful uses of project finance. Large natural gas pipelines and oil refineries have been financed with this model. Before the use of project finance, such facilities were financed either by the internal cash generation of oil companies, or by governments.

■ Mining :Project finance is used to develop the exploitation of natural resources such as copper, iron ore, or gold mining operations in countries as diverse as Chile, Ghana and Australia.

■ Highways: New roads are often financed with project finance techniques since they lend themselves to the cash flow based model of repayment.

■ Telecommunications: The burgeoning demand for telecommunications and data transfer via the Internet in developed and developing countries necessitates the use of project finance techniques to fund this infrastructure development.

■ Other: Other sectors targeted for a private takeover of public utilities and services via project finance mechanisms include pulp and paper projects, chemical facilities, manufacturing, hospitals, retirement care facilities, prisons, schools, airports and ocean-going vessels.

Why use project financing.

Non-recourse/limited recourse

Non-recourse/limited recourse is one of the key distinguishing factors underlying project finance. Classic long term lending typically depends on cash flows but the facilities’ ultimate credit rationale resides upon the creditworthiness of the borrower, since the lender will have a claim over the company’s assets.

In a project financing, this is rarely the case since the size of the operation may dwarf the size of the participating companies’ balance sheets.

Moreover, the borrowing entity may be a special purpose vehicle with no credit history.

This is why it is useful to distinguish between non-recourse and limited recourse project financings.

■ Non-recourse project financing.

Non-recourse project financing means that there is no recourse to the project sponsor’s assets for the debts or liabilities of an individual project. Non-recourse financing therefore depends purely on the merits of a project rather than the creditworthiness of the project sponsor. Credit appraisal therefore resides on the anticipated cash flows of the project, and is independent of the creditworthiness of the project sponsors. In such a scenario, the project sponsor has no direct legal obligation to repay the project debt or make interest payments

Limited recourse Project Finance.

In most project financings, there are limited obligations and responsibilities of the project sponsor; that is, the financing is limited recourse. Security, for example, may not suffice to fully guarantee a project. The main issue here is not that the guarantees offered fully mitigate the

■ Political risk diversification : Establishing SPVs (special purpose vehicles) for projects in specific countries quarantines the project risks and shields the sponsor (or the sponsor’s other projects) from adverse developments.

Risk sharing : Allocating risks in a project finance structure enables the sponsor to spread risks over all the project participants, including the lender. The diffusion of risk can improve the possibility of project success since each project participant accepts certain risks; however, the multiplicity of participating entities can result in increased costs which must be borne by the sponsor and passed on to the end consumer – often consumers that would be better served by public services.

Collateral limited to project assets : Non-recourse project finance loans are based on the premise that collateral comes only from the project assets. While this is generally the case, limited recourse to the assets of the project sponsor is sometimes required as a way of incentivizing the sponsor.

Lenders are more likely to participate in a workout than foreclose : The non-recourse or limited recourse nature of project finance means that collateral (a half-completed factory) has limited value in a liquidation scenario. Therefore, if the project is experiencing difficulties, the best chance of success lies in finding a workout solution rather than foreclosing. Lenders will therefore more likely cooperate in a workout scenario to minimize losses.

Disadvantages of project finance

Complexity of risk allocation: Project financings are complex transactions involving many participants with diverse interests. This results in conflicts of interest on risk allocation amongst the participants and protracted negotiations and increased costs to compensate third parties for accepting risks.

Increased lender risk . Since banks are not equity risk takers, the means available to enhance the credit risk to acceptable levels are limited, which results in higher prices. This also necessitates expensive processes of due diligence conducted by lawyers, engineers and other specialized consultants.

Higher interest rates and fees : Interest rates on project financings may be higher than on direct loans made to the project sponsor since the transaction structure is complex and the loan documentation lengthy. Project finance is generally more expensive than classic lending because of:

a. the time spent by lenders, technical experts and lawyers to evaluate the project and draft complex loan documentation;

b. the increased insurance cover, particularly political risk cover;

c costs of hiring technical experts to monitor the progress of the project and compliance with loan covenant;

d .the charges made by the lenders and other parties for assuming additional risks

■ Lender supervision: In order to protect themselves, lenders will want to closely supervise the management and operations of the project (whilst at the same time avoiding any liability associated with excessive interference in the project). This supervision includes site visits by lender’s engineers and consultants, construction reviews, and monitoring construction progress and technical performance, as well as financial covenants to ensure funds are not diverted from the project. This lender supervision is to ensure that the project proceeds as planned, since the main value of the project is cash flow via successful operation.

■ Lender reporting requirements : Lenders will require that the project company provides a steady stream of financial and technical information to enable them to monitor the project’s progress. Such reporting includes financial statements, interim statements, reports on technical progress, delays and the corrective measures adopted, and various notices such as events of default.

■ Increased insurance coverage : The non-recourse nature of project finance means that risks need to be mitigated. Some of this risk can be mitigated via insurance available at commercially acceptable rates. This however can greatly increase costs, which in itself, raises other risk issues such as pricing and successful syndication.

■ Transaction costs may outweigh the benefits : The complexity of the project financing arrangement can result in a transaction whose costs are so great as to offset the advantages of the project financing structure. The time-consuming nature of negotiations amongst various parties and government bodies, restrictive covenants, and limited control of project assets, and burgeoning legal costs may all work together to render the transaction unfeasible.

Why Do Sponsors Use Project Finance?

A sponsor can choose to finance a new project using two alternatives:

The new initiative is financed on balance sheet (corporate financing).

The new project is incorporated into a newly created economic entity, the SPV, and financed off balance sheet (project financing)

Alternative 1 means that sponsors use all the assets and cash flows from the existing firm to guarantee the additional credit provided by lenders. If the project is not successful, all the remaining assets and cash flow can serve as a source of repayment for all the creditors (old and new) of the combined entity (existing firm plus new project).

Who Are the Sponsors of a Project Finance Deal?

By participating in a project financing venture, each project sponsor pursues a clear objective, which differs depending on the type of sponsor. In brief, four types of sponsors are very often involved in such transactions:

Industrial sponsors , who see the initiative as upstream or downstream integrated or in some way as linked to their core business

. Public sponsors (central or local government, municipalities, or municipalized companies), whose aims center on social welfare

Contractor/sponsors , who develop, build, or run plants and are interested in participating in the initiative by providing equity and/or subordinated debt

. Purely financial investors.

2. THE PROJECT FINANCE MARKETS.

Introduction..

Private-sector project-finance debt has traditionally been mainly provided from two sources— commercial banks and bonds. Commercial banks provide long-term loans to Project Companies; bondholders (typically life-insurance companies and pension funds, which need long-term cash flows) purchase long-term bonds (tradable debt instruments) issued by Project Companies. Recently these non-bank lenders have also begun to make direct loans to projects, and

participate in debt funds. Although the financial and legal structures and procedures are different, the criteria under which debt is raised in each of these markets are much the same. So ‘lender’ is used here to mean either a bank lender, bondholder, non-bank lender or debt fund.)

COMMERCIAL BANKS.

Commercial banks are the largest providers of project-finance. Commercial banks are the largest providers of project-finance. Banks in the market - It is usually preferable for a project in a particular country to raise its funding from banks operating in that country, first because they have the best understanding of local conditions. Secondly because the funding can be provided in the currency of the country, so avoiding foreign exchange risks. Thus, in developed countries projects are normally financed by local banks or foreign banks with branch or subsidiary operations in the country concerned. Such financing constitutes the largest proportion of the project finance market. In some developing countries, however, this approach may not be possible. There may be no market for long-term loans in the domestic banking market, or the domestic banks may have no experience in project finance. In some developing countries (such as India and Brazil), there are public-sector local development banks that can help to fill the gap if the local commercial banks are not able to provide the funding needed, but their capacity is also limited. Thus, the international banking market also plays a major role in project finance for developing countries. Other banks participate in the project-finance market at the next level down as sub-underwriters or participants in syndicated loans. These generally participate in syndications of domestic loans in their own countries, though others may join a wider range of loans around the world originally arranged and underwritten by the larger players in the market.

A bond issued by a Project Company is similar to a loan from the borrower’s point of view, but it is aimed mainly at the nonbanking market and takes the form of a tradable debt instrument. The issuer (i., the Project Company) agrees to repay to the bondholder the amount of the bond plus interest on fixed future installment dates. Buyers of project finance bonds are investors who require a good long-term fixed-rate return without taking equity risk, in particular insurance companies and pension funds. (Note that a bond in this context has nothing to do with "bonding" or "bonds" issued as security, e., in an EPCC contract. Bonds may also be referred to as "securities," "notes," or “debentures.") The market for project finance bonds is far narrower in scope than that for bank loans, but significant in certain countries that for bank loans, but significant in certain countries.

Mezzanine and Subordinated debt - Subordinated debt is debt whose repayment ranks after repayments to senior bank lenders or bond investors (senior debt), but before distributions of profits to investors. It is usually provided at a fixed rate of interest higher than the cost of senior debt.

● Development . The period during which the project is conceived, the Project Contracts are negotiated, signed, and come into effect, and the equity and project-finance debt are put in place and available for drawing—the end of this process is known as ‘Financial Close’.

This phase is more complex than it might appear at first sight, and can easily run on for several years.

● Construction . The period during which the project finance is drawn down and the project is built—the end of this process will be referred to hereafter as ‘Project Completion’.

● Operation . The period during which the project operates commercially and produces cash flow to pay the lenders’ debt service and the investors’ equity return.

The Sponsors play the primary role during the development phase of the project, managing this process with the support of external advisors .Where more than one Sponsor is involved, a joint- venture structure has to be agreed upon. The Project Company is usually set up towards the end of the development phase and manages the project from Financial Close. The project may also be developed initially by parties other than the Sponsors through a bidding (public procurement) process for a PPP project, organized by a Contracting Authority.

Sponsors and Other Investors.

In order to obtain project-finance debt, the investors have to offer priority payment to the lenders, thus accepting that they will only receive their equity return after lenders have been paid their debt service. Therefore, investors assume the highest financial risk, but at the same time they receive the largest share in the project’s profit (pro rata to the money they have at risk) if it goes according to plan. The active investors in a project are usually referred to as the ‘Sponsors’ meaning that their role is one of promotion, development, and management of the project. Even though the project-finance debt is normally non-recourse (i. the lenders have no guarantees from the Sponsors), their involvement is important. One of the first things a lender considers when deciding whether to participate in a project financing is whether the Sponsors of the project are appropriate parties.

Lenders wish to have Sponsors with :

● experience in the industry concerned and, hence, the ability to provide any technical or operating support required by the project;

● arm’s-length Sub-Contract arrangements with the Project Company (if a Sponsor is also a Sub- Contractor);

● a reasonable amount of equity invested in the project, which gives the Sponsors an incentive to provide support to protect their investment if it gets into difficulty;

● A reasonable return on their equity investment: if the return is too low there may be little incentive for the Sponsors to continue their involvement with the Project Company, and also limited cash-flow cover for the lenders.

● The financial ability (although not the obligation) to support the project if it runs into difficulty.

Typical Sponsors in projects using project finance include :

 Construction Contractors, who use the investment in a project as a way of developing ‘captive’ contracting business.  equipment suppliers, again using their investment to develop ‘captive’ business;  operators or maintenance contractors, here also using the investment to develop their business;  Fuel or other Input Suppliers, who use the project as a way of selling their products (e. a company supplying natural gas to a power project);  Off takers of the project’s products (e. electricity) who do not wish (or are not able) to fund the construction of the project directly, or who are constrained from doing so by government policy, but who have the resources to invest in part of the equity (or are offered equity in return for signing an off take contract.  Companies that wish to improve their return on equity, or spread their risks among a wider portfolio in the relevant industry than could be financed on balance sheet with corporate debt Offtake Contract).

Passive and secondary investors Sponsors may bring in other, more ‘passive’, investors such as:

investment funds specializing in project-finance● equity, especially in the

infrastructure sector (but such funds may themselves also act as Sponsors); ● institutional investors, such as life-insurance companies and pension funds, that are prepared to make direct equity investments in projects, rather than via investment funds;  shareholders in quoted equity issued by the Project Company on a stock exchange;  Contracting Authorities  local partners, where the Sponsor is a foreign investor  DFIs, such as International Finance Corporation , who may invest directly, or via investment funds;  sovereign wealth funds, which have started to invest in this sector, again directly or via investment funds.

process that will take extra work and time. Finance can thus become a major critical-path item.

As with any new investment, the Sponsors normally undertake a feasibility study when initially considering the investment. If project finance is being used, then structural requirements resulting from this study (e. the terms of the Project Contracts) also need to be considered at this early stage since these may affect the commercial approach to and hence the feasibility of the project. The Sponsors need to set up a development team with a mixture of disciplines, depending on the nature of the project, e.: ● design, engineering and construction; ● operation and maintenance; ● legal; ● accounting and tax; ● financial structuring; ● financial modeling.

It is important that this team is well-coordinated: one of the most common errors during project development is for the Sponsors to agree on a Project Contract that is commercially sound, but not acceptable from a project-finance point of view: for example, the fuel may be cheap, but the supply contract does not cover the loan period; or the Construction Contract may be at a low price, but the financial penalties on the Construction Contractor for failure to build on time or to specification are not adequate for lenders. Insofar as the Sponsors do not have the necessary in-house expertise to perform all these tasks, external advisors also have to be used.

THE ROLE OF ADVISORS . Various external advisors are usually used by the Sponsors during the project development and financing process. They can play a valuable role, especially if the Sponsor has not undertaken many such projects in the past, since they will probably have had greater experience in a variety of projects than the sponsors’ in-house staff; if a sponsor is not developing a continuous pipeline of projects, employing people with the necessary expertise just to work on one project may be difficult. Using advisors with a good record of working in successful projects also gives the project credibility with lenders.

The Sponsors may also make use of other project counterparts in an advisory capacity—e. even if the O&M Contractor is not a Sponsor, it may offer advice on the design of the project based on the practical experience of operating

similar projects. The lenders use a parallel set of advisors to those employed by the Sponsors (other than a Financial Advisor) as part of their due-diligence process.

Financial advisor Unless the sponsors are experienced in project development, problems are highly likely to be caused by negotiation of Project Contract arrangements that are later found to be unacceptable to the banking market. Therefore Sponsors without in house project finance expertise need financial advice to make sure they are on the right track as they develop the project. Financial advisory services may be provided by banks, investment banks accounting firms,or advisory boutiques. There are three ways in which a financial advisor may be involved: ● advice to Sponsors who are developing their own project; ● advice to a Contracting Authority undertaking a public procure

 advice to potential Sponsors bidding in a public procurement.

The financial advisor in project finance has a more wide-ranging role than would be the case in general corporate finance. The structure of the whole project must meet project-finance requirements, so the financial advisor must anticipate all the issues that might arise during the lenders’ due-diligence process, ensuring that they are addressed in the Project Contracts.

The financial advisor’s scope of work under an advisory agreement typically includes:

 advising on the optimum financial structure for the project;

● preparing a financial model for the project;

● assisting in the preparation of a financial plan;

● advising on sources of debt and likely financing terms;

● advising on the financing implications of Project Contracts and assisting in their negotiation;

● preparing an information memorandum to present the project to the financial markets;

● advising on evaluating proposals for financing

 advising on selection of commercial-bank lenders or placement of bonds;

Financial Modeler . If the Sponsors have enough confidence in their own ability to raise finance, they may not retain a financial advisor, but may still retain a financial modeler. This is usually an accounting firm or a modeling boutique.

Insurance . For the role of the insurance broker.

THE PROJECT COMPANY

The Project Company lies at the center of all the contractual and financial relationships in project finance**.** These relationships have to be contained inside a project finance ‘box’, which means that the Project Company cannot carry out any other business which is not part of the project (since project finance depends on the lenders’ ability to evaluate the project on a stand- alone basis). Thus in most cases a new company is incorporated specifically to carry out the project. The corporate form of borrower is generally preferred by lenders for security and control reasons. The Project Company is usually incorporated in the country in which the project is taking place, although it may occasionally be beneficial to incorporate it outside the country concerned.

The Sponsors may use an intermediary holding company in a favorable third country tax jurisdiction, e. to avoid capital-gains tax if they sell their equity in the Project Company at a profit (by just selling the holding company instead), or to ensure that withholding tax is not deducted from dividends. A holding company structure may also be necessary as part of the lenders’ security package. In some projects a form other than that of a limited company is used. The commonest alternative is a limited partnership, so the Sponsors’ liability remains limited in the same way as if they were shareholders in a limited company, but the income of the project is taxed directly at the level of the Sponsors, or tax depreciation on its capital costs can be deducted directly against Sponsors’ other income, rather than in the Project Company. In oil- and gas-field developments, the Sponsors may use an unincorporated joint venture as a vehicle to raise funding. The Sponsors sign an operating agreement, which usually provides for one of them to be the operator, dealing with day to-day management, subject to an operating committee. The operator enters into the Project Contracts (e. for construction of a rig) and makes cash calls on the other Sponsors on an agreed basis. If a Sponsor defaults, the others may undertake to pay, and the interest of a defaulter who does not remedy the situation is forfeited.

The liability of the operator to third parties needs to be made clear in the Project Contracts: is the operator directly liable and relying on being reimbursed by cash calls, or acting as an agent for the other Sponsors, incurring liability on their behalf? In this structure the Sponsors usually participate through individual SPVs, and may raise funding individually through these companies to cover their share of the project costs, rather than raising finance collectively for the project.

This structure is beneficial for Sponsors with a good credit rating who wish to raise funds on a corporate basis, while other financially weaker partners use project finance for their share. (However, the lenders’ security position may be less than ideal in such cases.)

b. Shareholder Agreement

If there is more than one Sponsor, once the Project Company has been set up and is responsible for managing the implementation of the project, the Development Agreement previously signed by the Sponsors is normally superseded by a Shareholder Agreement (although it is possible to have one agreement for both phases of the project).

The Shareholder Agreement covers issues such as:

● percentage share ownership;

● procedure for equity subscriptions;

● voting of shares at the annual general meeting;

● board representation and voting;

● appointment and authority of management;

● conflicts of interest (e. if the Construction Contractor is a Sponsor, it may

not be allowed to participate in board discussion or voting on issues relating

to the Construction Contract);

● budgeting;

● distribution of profits;

● sale of shares by Sponsors, usually with a first refusal (preemption) right

being given to the other Sponsors, or there may be ‘tag along’ rights, i. if

one Sponsor agree to sell its share to a third party, the other(s) will have the

option to sell to this party at the same price;

● reserved matters, i. decisions which require the approval of all

shareholders;

● provisions for dispute resolution.

c. Management and Operations

• Multiple Choice

Course : Business Finance (ACF 361)

University : kwame nkrumah university of science and technology.

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Question: ACC4100 Project Cost Management and FinanceProject Assignment ‐ Part 1This assignment is to be completed individually.The criteria for selecting a project is as follows:Project Criteria ValueDuration at least 6 monthsBudget $100,000 to $1,000,000Resources more than 5 resourcesStakeholders more than 6 stakeholdersExamples starting a new business, creating a

ACC4100 Project Cost Management and Finance Project Assignment ‐ Part 1

This assignment is to be completed individually. The criteria for selecting a project is as follows: Project Criteria Value Duration at least 6 months Budget $100,000 to $1,000,000 Resources more than 5 resources Stakeholders more than 6 stakeholders

Examples  starting a new business,  creating a new product or service,  planning and executing an event such as a wedding, charity event or music festival. Note: The criteria should not be included in the assignment contents.

Assignment Overview This project assignment allows you to apply both the course learning and your practical experience to a project of your choice. Project cost and financial information are critical to the success of all projects. This assignment requires you to select a project then provide the information as outlined below. Create the report as if it was a summary to be presented to an executive Sponsor or a Steering Committee. Use all the headings as identified in the outline below and follow the instruction for what to include in the contents.

Project Cost and Finance Information TABLE OF CONTENTS INTRODUCTION Project Name Select a project based on your previous experience or a project that you would like to be involved with. Provide the project name

CONTENT SECTIONS

Business Case Create a compelling business case that includes the three characteristics of a good pitch and explains the value of your project. You need to include the cost of the project, the financial benefit or revenue and two financial measures from the 5 discussed in class (i.e., such as ROI, payback period, etc.). You need to provide some justification for the financial return. You also need to explain how this project is aligned to the organizational (or your personal) objectives.

Project Selection Submission Provide details for submission to a project selection committee. Identify or create the company's project selection criteria and clearly state how your project meets or exceeds the criteria based on financial models. Be sure to include at least one alternative project in order to compare the values. Include any and all financial details for the submission as well as any other non‐financial factors.

Cost Estimate List the categories of costs for the project and create a cost estimate for each category. Identify how the costs are created and show at least two examples of the costs in this section. using table for the clear understand.

Summary A brief summary. References must be mention. Properly list any references used. Grading Rubric (This describes how the Marking criteria values are determined)

INTRODUCTION

Project Name: Innovative Mobile App Development for Small Businesses

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