Fixing the zero date is important step in establishing a project-
Priliminary steps
Establishing a project involves several crucial phases, starting from initiation and planning through execution, monitoring, control, and closure. One of the fundamental elements that needs to be defined early in the project planning process is the project start date. This start date is often referred to as the "zero date" because all subsequent project activities and timelines are scheduled relative to this point.
Fixing the zero date is considered a crucial preliminary step in establishing a project for several reasons:
These activities clearly fall under the initial or preliminary phases of project planning and definition.
Based on the function and timing within the project lifecycle, fixing the zero date is unequivocally a preliminary step.
| Phase | Typical Activities | Zero Date Role |
|---|---|---|
| Initiation | Define project goal, feasibility study, project charter | Often identified or estimated |
| Planning (Preliminary) | Develop project management plan, define scope, fix zero date, create WBS, schedule development, resource planning | Crucial step: Date is fixed, schedule built upon it |
| Execution | Perform project work, manage communications, manage resources | Project activities start from this date |
| Monitoring & Control | Track progress against baseline, manage changes, risk monitoring | Progress measured against the schedule derived from the zero date |
| Closure | Finalize activities, close contracts, post-mortem review | Project ends relative to the start date |
Setting an accurate and realistic zero date is vital. An incorrect or delayed start date can cascade through the entire project schedule, affecting deadlines, resource availability, and potentially project costs and quality. Factors to consider when fixing the zero date include:
Careful consideration during the preliminary planning phase ensures the project starts on solid ground.
A firm is currently earning Rs. 50,000 and its one share has a present market value of Rs. 175. It has 5,000 shares outstanding. The earnings of the firm is expected to remain stable and it has a payout ratio of 100%. The cost of equity is:
With project cost of ₹300 lacs, profits after depreciation (straight line method) and tax for its lifetime of 5 years are estimated at ₹10 lacs, ₹10 lacs, ₹30 lacs, ₹40 lacs and ₹50 lacs respectively. The cost of capital is 12% and discount factors @ 12%, for the first five years are 0.89, 0.80, 0.71, 0.64 and 0.57 respectively. The Net present value of project is :
Match List I with List II
LIST I (Investment Decision rule) | LIST II (Feature) | ||
| A. | NPV | I. | Insufficiently consistent |
| B. | Payback | II. | Highly Inflexible |
| C. | Cash Returns | III. | Balance between flexibility and consistency |
| D. | Accounting Returns | IV. | Relatively consistent |
Choose the correct answer from the options given below:
Which of the following are assumption of Net Operating Income Approach of Capital Structure?
(A) There is no Corporate Tax
(B) Cost of debt remain constant at all level
(C) The Business risk remain constant every level of debt and equity mix
(D) The cost of Debt is less than cost of equity
(E) Overall cost of Capital remain constant
Choose the correct answer from the options given below: