CPCCBC5019 Manage Building and Construction Business Finances

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Assessment Task 3 – Major Project

Overview

The goal of this assessment is to assess your practical knowledge and skills in:·      Identifying requirements of the business·      Managing business finances

·      Processing taxation, insurance, and payments

Resources required for assessment:

To complete this assessment, you will need access to the following:

·      CPCCBC5019 Alexander Street Commercial Project File

·      Documentation templates, including:

o  Generic Risk Assessment Report

o  BAS Template - think we should remove this from the until we get one filled out for the project

o  Cash Flow Template

o  Business Expense Budget Template

Question 1: You are required to:Access the project file for CPCCBC5019 and review the provided documents. The Project to be discussed will be a commercial project. Value of the project will be $13.2million and will be constructed over a period of 11 months.Assumptions:

1.       Build Cost: $10.5 million

2.       Payment schedule: Monthly on completed cost centre

3.       Total Company Overheads $792,000

4.       Company Overheads related to the project $72,000/ month

5.       Cash in bank at commencement of project: $550,000

6.       Cost Centre Breakdown - % of build cost

ITEM COST CENTRE % WBS
1 Preliminaries 3.8
2 Site Establishment 5.5
3 Site excavation & Cleaning 4.5
4 Drainage 9.0
5 Concreting 6.0
6 Masonry 8.5
7 Electrical 8
8 Services 7
9 Plumbing 7.5
10 Roof Plumbing 10.2
11 Glazing 10.5
12 Carpentry 7.5
13 Painting 3.5
14 Tiling 3.5
15 Fire Services 5
Question 2: You are required to do an actual cashflow using the Actual cost (tab in the cash flow projection).Assumptions:1.       The actual cash flow section of the projection the initial build cost was $10.5 Million Payment schedule: Monthly on completed cost centre.

2.       Actual was $600,000.00 less all the % stay the same.

You will need to work out the costs and insert the cost in the table Material cost / contractor table.

Part 1 – Cashflow

Review the project file and create a cashflow projection using the Cashflow template provided along with this workbook, together with the information provided in the scenario above.Your cashflow projection must be fully completed
After completing this task, submit the following to your assessor:·           Cashflow Projection

Part 2- Risk Assessment

Using the Generic Risk Assessment template provided along with this workbook conduct a risk assessment for the project to identify the likelihood of adverse outcomes and the impact of adverse consequences.You will be required to identify and rate risks related to liquidity, credit risks and foreign exchange. Once identified you will need to evaluate the likelihood of these risks occurring, as well as consequences if they were to occur. Your trainer will guide you through this process.
After completing this task, submit the following to your assessor:·         Completed Risk Assessment Form

Part 3 – Obligations

Prepare a short 5 minute presentation on the obligations and responsabilities of managing finances of the business, including the business systems you would need to establish.You will be assessed on:·         Your practical knowledge of different measures you can take to remain compliant with business changes

·         Your practical skills relevant to developing a set of measures for remaining compliant with business changes

Part 4 – Monitor & Review

You are required to review the project finances on a monthly basis and report on budget vs actual expenses. Using the Budget Expense template provided along with this workbook complete the actual expenses throughout the lifecycle of the project and review against the budgeted expenses.After completing this task, submit the Budget / Expense & Variance Report to your assessor.You are required to complete a BAS statement for the first quarter of your project based on your actual income / expenses. Use the BAS Template form provided along with this workbook.

After completing this task, submit the completed BAS Statement to your assessor.

Part 5 – Taxation

You are required to complete a BAS statement for the first quarter of your project based on your actual income / expenses. Use the BAS Template form provided along with this workbook.After completing this task, submit the completed BAS Statement to your assessor.

Part 6 – Written Questions

1.      What business systems and programs would you establish to manage business financial requirements
2.      How would you ensure you remain up to date and compliant with industry and business changes.
3.      Based on your cashflow, in what month would you pay the following suppliers:
Supplier Payment Month
Concreter - Slab
Glazier - Windows
Fire Services
4.      Describe your process for retaining payment and taxation records:
5.      Describe how you would Manage receipt of revenue and progress payments?
6.      What action could be taken / processes implemented for outstanding debt?
7.      Review cashflow & budget / actual expenses of the project:Identify any potential issues related to financial health of the projectWhat action would you take to rectify?
8.      Describe your process for record keeping
9.      How many years do you need to legally keep financial records for?
10.  What options could you introduce to improve the financial position of the business? Describe at least two options
11.  What process would be required to monitor loan and interest repayments?
12.  Describe how you would process payments to employees on time and contractors and suppliers by the due date
13.  Review the current insurance in place for the business.Are any adjustments required to current insurance arrangements to accommodate business growth or changes to operations?

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