Transcript Making a Financial C..

ILM Level 5
Making a Financial Case
Presenter name
Two financial
units to the level 5 programme
 Making a Financial Case
 Understanding Financial
Management
2
Your personal objectives...
3
Areas to be covered
Over the unit we will be considering how to:
Day 1:
 Differentiate between the direct and indirect costs of the business
 Identify the fixed and variable costs of the business
 Use break-even and contribution analysis
 Understand the principles of three costing systems
 Consider some simple strategies for profit improvement
Day 2:
 Understand and apply the main investment methods used in business
 Discuss the strengths and weaknesses of each method
 Understand the importance of risk and the need for sensitivity analysis
 Identify a structure for controlling and reviewing capital projects
5
Day 1
7
Understanding
Costs
Direct Costs
Direct
Materials
Direct
Labour
Direct
Expenses
Front Line Service
Direct Costs
Cost
Direct Costs:
These costs are
normally directly
attributable to
the manufacture
of the product, or
the provision of
the front line
service.
Code
Cost Category
Description
A
Direct Labour
The people who directly
make the product, or
provide the front line
service
B
Direct Materials
Any materials consumed
in the manufacturing
process /provision of the
front line service
C
Direct Expenses
Associated directly with
the manufacture of the
product/ provision of the
service, eg. hire of
specialised equipment,
any royalties payable as
commission
Indirect ‘Overhead’ Costs
Indirect ‘Overhead’ Costs
Indirect Costs:
These costs are
commonly known
as ‘overheads’.
They comprise
those factors that
are not directly
attributable to the
manufacture of
the product, or
provision of the
front line service,
eg.
D
Indirect
labour
Managers, supervisors,
maintenance and cleaning
staff
E
General
administration
General office staff and
office materials
F
Reception
Staff
G
Marketing and
distribution
Advertising, selling,
promotions, transport
costs, marketing and
distribution staff
H
Buildings
occupancy
Rent/rates, property taxes,
insurance, heating,
lighting, water rates,
electricity, repairs and
maintenance
Direct and Indirect Costs
Activity: Now consider your own operational area and see if you
can divide it up into the front line service and support service and,
consequently, make a brief list of the direct and indirect costs.
Direct Costs
13
Indirect Costs
Fixed and Variable Costs
Fixed Costs: in
the short-term
stay the same
each month
Variable Costs: vary
with changes in
activity
Activity: workbook p.9 - For the focus of this activity, let’s use the
example of the Olympic swimming pool. Working with a partner consider
which of the following costs should be treated as fixed or variable by
ticking the appropriate column.
Fixed and Variable Costs
Activity: Consider your own operational are – what are your fixed
and variable costs?
Fixed Costs
15
Variable Costs
Break Even Analysis
Break-even analysis helps the business to:
1. calculate the total costs of providing a service
2. forecast the revenue that needs to be generated in
order to cover costs and start making a profit


The break-even point occurs where total costs
equals total revenue
Any revenue below the break-even point is at a
financial loss to the organisation for that particular
product/service. Once revenue has exceeded the
break-even point, then the organisation will be
operating at a profit.
Activity: Constructing a Break
Even Table
To illustrate the break even concept, you can construct a breakeven table. For this example we will use the University Sports
Centre
Activity: The centre has fixed costs of £10,000 per month
 It charges an entry fee to the centre of £1.50
 It incurs variable costs per customer, eg electricity to power
fitness machines, use of shower etc, of £0.50 per customer.
 The monthly break-even point can be calculated by completing
the table below.
Break-Even Analysis
Demand
no. of
customers
Fixed
Costs
£10,000
Variable Costs
(£0.50 per
customer)
multiply by demand
(customers)
Total Costs
(Fixed Costs +
Variable Costs)
Sales Revenue
(£1.50 per
customer)
multiply by demand
(customers)
0
10,000
0
10,000
0
2,000
10,000
1,000
11,000
3,000
4,000
6,000
8,000
10,000
12,000
Break-Even Analysis
Demand
no. of
customers
Fixed
Costs
£10,000
Variable Costs
(£0.50 per
customer)
multiply by demand
(customers)
Total Costs
(Fixed Costs +
Variable Costs)
Sales Revenue
(£1.50 per customer)
multiply by demand
(customers)
0
10,000
0
10,000
0
2,000
10,000
1,000
11,000
3,000
4,000
10,000
2,000
12,000
6,000
6,000
10,000
3,000
13,000
9,000
8,000
10,000
4,000
14,000
12,000
10,000
10,000
5,000
15,000
15,000
12,000
10,000
6,000
16,000
18,000
REVENUE
VARIABLE
COSTS
K EVE
N
REVENUE/COSTS
B R EA
TOTAL
COSTS
FIXED
COSTS
SALES(UNITS)
The Contribution Method
Need to know:
 Fixed cost allocation
 Variable costs per unit (customer)
 Sales price per unit (revenue per customer)
Contribution = selling price less variable costs
Contribution means the ‘contribution’ of each unit sale to:
 Payment of fixed costs
 The generation of a profit
Example:
£
Price 1.50
(Less) Variable cost 0.50
Contribution 1.00
Break-Even Point (BEP) =
Therefore the BEP
(customers)
Fixed costs / contribution per unit
=
10,000 / 1 = 10,000 customers
Activity

Using the contribution method, calculate the following break even
points (BEPs). Complete the table in your workbook on p. 14.

(The original figures may change for each subsequent calculation
where stated. You should always use the most recent figure. The
BEP should be expressed in units of demand. Use the table below, to
enter your calculations.)

The first BEP has been calculated for you. Follow exactly the same
approach to calculate the BEPs for scenarios 2 to 6.

Scenario: The Sports Centre has expanded and it is now including
some premium extra value added services in the price charged to the
customer, hence the increased entry price. This decision is taken in a
bid to compete with two new private leisure centres which have opened
locally.
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Selling Price (less)
Variable Costs =
Contribution
1.
2.
3.
4.
5.
6.
9.00
6.50
2.50
Fixed costs /
Contribution per
customer
15,000/2.50
Break-Even Point
(no. of customers)
6,000
Selling Price (less)
Variable Costs =
Contribution
Fixed costs /
Contribution per
customer
Break-Even Point
(no. of customers)
1.
9.00
6.50
2.50
15,000/2.50
6,000
2.
7.00
6.50
0.50
15,000/0.50
30,000
3.
11.00
6.50
4.50
15,000/4.50
3,333
4.
11.00
8.50
2.50
15,000/2.50
6,000
5.
9.00
8.50
0.50
15,000/0.50
30,000
6.
9.00
8.50
0.50
9,000/0.50
18,000
Costing Methods
Costing Methods
The aim of a costing system is to
ensure that all the costs of a business
are recovered by being charged to that
part of the business making the money,
which is normally the front line
operation.
 Absorption costing
 Marginal costing
 Activity-based costing
Marginal Costing Vs Absorption Costing
A technique for dealing with Absorbs all costs (the direct
variable costs
costs and a proportion of
the indirect [overhead]
Producing one extra unit will costs) into each unit of sale
incur an increase in variable
costs (direct labour,
materials and expenses) =
marginal cost
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Absorption Costing
The sports centre allows admission only through a one
year membership scheme. It has 2 key income earning
facilities: its gym and sports hall. It allocates the direct
costs for each facility accordingly
Gym
Sports Hall
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Direct Costs
eg. £30,000 for the year
based on 100 members
Direct Costs
eg. £25,000 for the year
based on 100 members
Absorption Costing
If each of the above sports centre facilities accounted for
50% of sales, the decision could be made to allocate 50% of
the centre’s indirect (overhead) costs to both the gym and
the sports hall respectively
Gym
Direct Costs +
50% of Indirect
‘Overhead’ Costs
= Total Cost
Absorption Costing
If total indirect (overhead) costs for the sports centre over the period are
forecast to be £20,000, then:
50% of £20,000
£10,000
the total indirect costs to be allocated to the gym for the period
=
=
Total Costs for
running the Gym
for a year
(based on 100
members)
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Direct Costs (£30,000) +
50% of Indirect ‘Overhead’
Costs (£10,000)
= Total Cost (£40,000)
Calculating the Total Cost to be allocated to
each Membership Fee
Scenario 1:
 Based on 100 paying members
 Direct costs for running the gym for the year = £30,000
 Indirect costs allocated to the gym = £10,000

Direct costs to be allocated to each annual membership fee:
£30,000 direct costs / 100 customers = £300

Indirect costs to be allocated to each annual membership fee:
£10,000 indirect costs allocated / 100 customers = £100

Total costs per member:
£300 direct costs + £100 indirect cost = £400

The membership card fee for the gym is, therefore, £400 plus the profit margin
Pairs Activity: complete the financial calculations in scenario 2 on p.18 of the
workbook
Marginal Costing Vs Absorption Costing
When is it appropriate to use each technique?
 Absorption Costing - when forecasting demand for the year
ahead – because at this stage of planning, we need to ensure
that all costs will be absorbed into the forecast demand for the
period.
 Marginal Costing - when taking on a non-forecast job –
assuming that forecast demand is on target, the indirect
overhead costs will have already been accounted for; we have,
therefore, the opportunity to cost the job only taking into
consideration an increase in the variable costs (the marginal
cost).
 Activity: To compare both costing techniques in action let’s
look at the following mini case study on pps. 19/20 of the
workbook
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Sales Revenue per month:
100 bikes @ £100 each
50 bikes @ £60 each
100 bikes @ £40 each
Total Sales Revenue
Less Production Costs:
Direct Materials (£20 per unit)
Direct Labour (£25 per unit)
Fixed Factory Overheads
Total Production Costs
Gross Profit
(Total Sales Revenue less Total Production Costs)
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Existing
Production:
100 bikes @ £100 per
bike
Existing
Production:
100 bikes @ £100 per
bike
Plus
Option A:
50 bikes @
£60 each
Existing
Production:
100 bikes @ £100 per
bike
Plus
Option B:
100 bikes @
£40 each
£
£
£
Existing
Production:
100 bikes @ £100
per bike
Sales Revenue per month:
£
Existing
Production:
100 bikes @ £100
per bike
Plus
Option A:
50 bikes @
£60 each
£
100 bikes @ £100 each
10,000
10,000
50 bikes @ £60 each
Existing
Production:
100 bikes @ £100
per bike
Plus
Option B:
100 bikes @
£40 each
£
10,000
3,000
100 bikes @ £40 each
4,000
10,000
13,000
14,000
Direct Materials (£20 per unit)
2,000
3,000
4,000
Direct Labour (£25 per unit)
2,500
3,750
5,000
Fixed Factory Overheads
3,500
3,500
3,500
Total Production Costs
8,000
10,250
12,500
2,000
2,750
1,500
Total Sales Revenue
Less Production Costs:
Gross Profit
(Total Sales Revenue less Total
Production Costs)
Marginal Pricing
 A contribution to fixed costs can be attractive
 Useful to gain market entry or increase
market share
 Be careful, this is a short-term tactic
 Don’t let the marginal price become the
market price
 Don’t undermine full paying customers
ABC Costing
Process:
 identify each necessary supporting activity in
the production process and collect costs into
a separate pool for each identified activity
 develop a measure for each activity, eg. a
measure for the engineering department may
be hours, whereas the measure for the
maintenance department may be square
metres
 use activity measures as cost drivers to
allocate costs to products
ABC in Action
Product A
200 hours
engineering time
91% engineering
cost allocated
Product B
20 hours
engineering time
9% engineering
cost allocated
Profit Improvement
Activity
In what ways can the
profitability of an
organisation be improved?
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Increase Profits?






Increase Sales Volume
Improve Selling Price
Re-negotiate Supplier Prices
Reduce Waste & Cut Bureaucracy!
Improve Quality (right first time)
Reduce COS & Overheads
PRICE
VARIABLE
COSTS
CLIENTS
FIXED
COSTS
Price increase of 1% = Profit increase of 11%
10.1
101
66.4
VARIABLE
COST
PRICE
24.5
FIXED
COST
PROFIT
9.1
Cost Efficiency
Activity: using the post-it notes and flip chart
pens provided in the workshop, identify
opportunities for greater cost efficiency within
your operational area or other areas in the
University that you have observed. Note the
outcome of this exercise below.
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Day 2
44
Investment Decisions
Today’s Objectives
 Understand and apply the main investment
methods used in business
 Discuss the strengths and weaknesses of
each method
 Understand the importance of risk and the
need for sensitivity analysis
 Identify a structure for controlling and
reviewing capital projects
Investment Projects
Investment Appraisal Objectives
 Expected benefits
 Choice between competing
alternatives
 If there is a shortage of funds
available, which proposals should
be chosen
Project Evaluation
 Does the project fit within overall objectives of
the business?
 How will it be funded?
 What other resources will be required and
timescales?
 How long will the project last and what are its
key stages?
 What is the expected pattern of cash flows?
 What are the ‘key sensitivities’ and what if…
scenarios?
 How does the investment compare with other
opportunities available? The opportunity cost!
Investment Appraisal Methods
 Payback period (PP)
 Accounting rate of return (ARR)
 Net present value (NPV)
 Internal rate of return (IRR)
Payback Period (PP)
Payback Scenario 1
 Activity: Let’s assume that the University’s Sports Centre has 3
projects in mind for developing the business, for example,
different sports hall layouts combining different activities. Each
project is forecast to generate different cash inflows but cost
roughly the same at £10,000 per project. The business can only
choose to go ahead with of the three projects and, therefore,
constructs a table below to make a comparison in order to help
the decision. See the following slide.
 If you were advising the Sports Centre management, which of
the 3 projects would you recommend from a financial
perspective? Explain your choice and reasons below.
52
Payback Period
Project
Initial Capital Outlay
A
B
C
£10,000
£10,000
£10,000
Cash Inflows:
Year
Cost less
Cash
inflows
Cost less
cash
inflows
Cost less
cash
inflows
1
1,000
(9,000)
7,000
(3,000)
1,000
(9,000)
2
1,000
(8,000)
2,000
(1,000)
8,000
(1,000)
3
1,000
(7,000)
2,000
1,000
2,000
1,000
4
7,000
0
0
0
0
0
5
10,000
10,000
0
0
0
0
Total
20,000
10,000
11,000
1,000
11,000
1,000
Payback Period
4 years
2.5 years
2.5 years
Payback Scenario 2
 Activity: Let’s assume that another opportunity for business
expansion has been identified by the Sports Centre. Calculate
the payback periods for each of the three projects below. We
will be using exactly the same figures below throughout the rest
of this section, to evaluate the 3 projects using the other
financial appraisal methods. See p.28 of the workbook.
 If you were advising the Sports Centre management, which of
the 3 projects would you recommend from a financial
perspective? Explain your choice and reasons below.
54
Payback Period Answer
Project
A
Initial
Capita
Outlay
Year
B
£240,000
Cash Inflows:
Cost less
Cash
inflows
C
£240,000
Cash Inflows:
Cost less
cash inflows
£240,000
Cash Inflows:
Cost less
cash inflows
1
60,000
(180,000)
40,000
(200,000)
140,000
(100,000)
2
100,000
(80,000)
40,000
(160,000)
100,000/120,000
= 1.83 years
20,000
3
80,000/100,000
= 2.8 years
20,000
40,000
(120,000)
48,000
68,000
4
80,000
100,000
120,000/140,000
= 3.86 years
20,000
40,000
108,000
5
60,000
160,000
140,000
160,000
20,000
128,000
400,000
160,000
400,000
160,000
368,000
128,000
Total
Payback
Period
2.8 years
3.86 years
1.83 years
Accounting Rate of
Return (ARR)
Accounting Rate of Return
 PP measures time not profitability
 ARR method actually measures
profitability.
 An organisation will set a required
rate of return on its investment.
 See example on following slide
57
ARR: Project A
Project A: initial capital outlay - £240,000
Year
Cashflow (less)
£000
Depreciation =
Net Profit
£000
£000
1
60
48
12
2
100
48
52
3
100
48
52
4
80
48
32
5
60
48
12
Total Net Profit
160
Evaluation
Total Net Profit
160
Rate of Return:
Average Net Profit/
Capital Expenditure x 100
Average Annual
Profit
32 (160/5 years)
32/240 x 100 = 13.33%
Activity: now calculate the ARRs for projects B and C on p.31 of the
workbook
ARR: Project B
Project B: initial capital outlay - £240,000
Year
Cashflow (less)
£000
Depreciation =
Net Profit
£000
£000
1
40
48
(8)
2
40
48
(8)
3
40
48
(8)
4
140
48
92
5
140
48
92
Total Net Profit
160
Evaluation
Total Net Profit
160
Rate of Return:
Average Net Profit/
Capital Expenditure x 100
Average Annual
Profit
160/5 years = 32
32/240 x 100 = 13.33%
ARR: Project C
Project C: initial capital outlay - £240,000
Year
Cashflow (less) Depreciation =
£000
£000
Net Profit
£000
1
140
48
92
2
120
48
72
3
48
48
0
4
40
48
(8)
5
20
48
(28)
Total Net Profit
128
Evaluation
Total Net Profit
128
Rate of Return:
Average Net Profit/
Capital Expenditure x 100
Average Annual
Profit
128/5 = 25.6
25.6/240 x 100 = 10.67%
Discounted Cash
Flow Methods: NPV
Net Present Value
 The Net Present Value (NPV) measures the
value of the money received at the end of
the project, eg. in 5 years’ time.
 NPV takes into account all of the costs
(except depreciation) and benefits of a project
as well as addressing the issue of timing of
cash flows.
PERIOD
1
2
3
4
5
6
7
8
9
10
5%
0.952
0.907
0.864
0.823
0.784
0.746
0.711
0.677
0.645
0.614
10%
0.909
0.826
0.751
0.683
0.621
0.564
0.513
0.467
0.424
0.386
15%
0.870
0.756
0.658
0.572
0.497
0.432
0.376
0.327
0.284
0.247
20%
0.833
0.694
0.579
0.482
0.402
0.335
0.279
0.233
0.194
0.162
NPV: Project A
Project A: initial capital outlay £240,000
Year
Cashflow (X)
Present
Discount Factor
(=)
£
10%
£
0
-240,000
-
-240,000
1
60,000
.909
+54,540
2
100,000
.826
+82,600
3
100,000
.751
+75,100
4
80,000
.683
+54,640
5
60,000
.621
+37,260
Net Present
Value
+64,140
Activity: now calculate the NPVs for projects B and C on p.35 of the
workbook
NPV: Project B
Project B: initial capital outlay £240,000
Year
Cashflow (X) Discount
Factor (=)
Present
£
10%
£
0
-240,000
-
-240,000
1
40
.909
+36,030
2
40
.826
+33,040
3
40
.751
+30,040
4
140
.683
+95,620
5
140
.621
+86,940
Net Present
Value
+42,000
NPV: Project C
Project C: initial capital outlay £240,000
Year
Cashflow (X)
Present
Discount Factor
(=)
£
10%
£
0
-240,000
-
-240,000
1
140
.909
+127,260
2
120
.826
+99,120
3
48
.751
+36,048
4
40
.683
+27,320
5
20
.621
+12,420
Net Present
Value
+62,168
Discounted Cash
Flow Methods: IRR
Internal Rate of Return
 If the discount rate is increased sufficiently,
eventually a rate will be identified which will
cause the NPV to exactly equal zero at the
end of the project life = the IRR
 Where there are competing projects, the one
with the highest IRR should be preferred
 See example on following slide
IRR: Project A
Project A
Year
Cashflow (x)
£
Discount Factor (=)
Present
20%
£
0
-240,000
-
-240,000
1
60,000
.833
+ 49,980
2
100,000
.694
+ 69,400
3
100,000
.579
+ 57,900
4
80,000
.482
+ 38,560
5
60,000
.402
+ 24,120
Net Present Value
+ 40
Activity: now fill in the table on p.38 of the workbook with
the summary of all the PPs, ARRs, NPVs and IRRs
Final Investment Evaluation
PP
ARR
NPV
IRR
Project A Project B Project C
2.8
3.86
1.83
13.33%
13.33%
10.67%
+£64,140 +£42,000 +£62,168
20%
15%
24%
Investment Appraisal Summary
The choice of project will depend
on the relative importance to the
business of:
 Liquidity
 Profitability
 Cost of capital investment
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Risk in Appraisal Investment
Sales
Prices and
Margins
Cash
Inflows
Project
Life
Project
Investment
Operational
Costs
Interest
Costs
Risk Analysis and Contingency
Planning
What is risk?
 the chance of exposure to the adverse
consequences of future events …
Risk Assessment
Response
What this means
Examples
Avoidance
Taking the risk out of the project
altogether
Generally used on RED status
risks
Reduce the scope of the project to remove the
risky task from it
Buy in specialists to eliminate a skills gap
Supplement a team to eliminate a capacity issue
Cancel the project!
Transference
Transfer the risk to a 3rd party
outside the organisation
Could apply to any High Impact
Risk regardless of RAG status
Insure against the risk, we do this without thinking
on our premises burning down!
Use fixed price or shared risk contracts with 3rd
parties where risk of overspend is identified (which
in turn leads to other risks)
Mitigation
Do something to reduce the
probability or impact of the risk
Good for reducing Red to Amber or
Amber to Green
Introduce QA and Testing procedures to deal with
product quality risks (Reduces probability)
Develop change management processes to reduce
risk of resistance to the project (Reduces probability)
Bring tasks that could cause delay forward in the
project schedule (Reduces Impact)
Acceptance
Accept the risk could happen and
either ignore it or put a contingency
plan in place for when it occurs
“Ignore” should only be used for
Green status risks
“Contingency” best for Green
status risks but can be acceptable
for Amber. Most common use is low
probability, high impact risks.
Invest in backup and recovery solutions as a
contingency for an IT system failure
Risk Log
Risk Description
Probability Impact
Response
Amount allowed for in
business plan is
insufficient to purchase
and implement the
chosen tool
Medium
High
Reduce amount of licences
to essential number of users
rather than optimum level
Procurement process
delays project delivery
Low
Medium
Accept risk as delay would
not be significant and
project benefits would still
be realised
Project not delivered to
programme
Medium
Medium
Accept risk as delay would
not be significant and
project benefits would still
be realised
Performing a Risk Analysis
Activity: Within your group, select a potential capital
investment programme.
 Identify the potential risks
 Assess the risk using the probability/impact matrix
 Assess how you are going to respond to each risk by
selecting one of the responses in the table on p.42 of
the workbook
 Complete the risk assessment template on p.43 of
the workbook
Flip chart and feedback
77
Screening Other
Criteria
The Criteria Matrix
Another method for screening decisions is the criteria
matrix. An example of this is presented on the next
slide. In this scenario, the purchasing department of
an organisation has decided to renew its fleet of 4
wheel drive vehicles. It has shortlisted 4 vehicles
from the original list of ten:




79
Honda CR –V
Nissan X-Trail
Toyota Rava
Land Rove Freelander
Price
10 £20,150
£19,800
£19,600
£22,000
MPG
(Urban)
8
35
32
29
28
Cost per
mile
7
45.7p
44.4p
46.0p
43.8p
Service
Intervals
5
12,500
12,000
10,000
15,000
0 to 60
Mph
3
10.5
secs.
12.4
secs.
12.6
secs.
15.2
secs.
TOTAL
SCORES
80
Score (W x R)
Rating (R)
Out of 4
Land Rover
Freelander
Score (W x R)
Rating (R)
Out of 4
Toyota Rava
Score (W x R)
Rating (R)
Out of 4
Nissan X-Trail
Score (W x R)
Rating (R)
Out of 4
Weighting (W)
Honda CR – V
Criterion
Criteria Matrix Answer
Land Rover
Freelander
Rating (R)
Out of 4
2
20
£19,800
3
30
£19,600
4
40
£22,000
1
10
MPG
(Urban)
8
35
4
32
32
3
24
29
2
16
28
1
8
Cost per
mile
7
45.7p
2
14
44.4p
3
21
46.0p
1
7
43.8p
4
28
Service
Intervals
5
12,500
3
15
12,000
2
10
10,000
1
5
15,000
4
20
0 to 60
Mph
3
10.5
secs.
4
12
12.4
secs.
3
9
12.6
secs.
2
6
15.2
secs.
1
3
74
Score (W x R)
Score (W x R)
Rating (R)
Out of 4
£20,150
94
Toyota Rava
Score (W x R)
Rating (R)
Out of 4
10
93
Nissan X-Trail
Honda CR – V
Score (W x R)
Weighting (W)
Price
TOTAL
SCORES
Rating (R)
Out of 4
Criterion
69
Management and Control of Projects
Case Study
84
Module Learning Objectives Review
By the end of this unit, you will be able to:
Day 1:
 Differentiate between the direct and indirect costs of the business
 Identify the fixed and variable costs of the business
 Use break-even and contribution analysis
 Understand the principles of three costing systems
 Consider some simple strategies for profit improvement
Day 2:
 Understand and apply the main investment methods used in business
 Discuss the strengths and weaknesses of each method
 Understand the importance of risk and the need for sensitivity analysis
 Identify a structure for controlling and reviewing capital projects
85