Justification for PM1

8/4/2019 Justification for PM1

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An Integrated ProjectManagement System -

Owner/Client Wealth

Maximization Focus

FEASIBILITY

RESEARCH Market analysis

Market priceSelling priceMarket growth rate

Etc.

Financial/Investment analysis

Economic analysisMicroMacro

Technical analysis

Legal analysis

Social analysis

Labor analysis

Environmental &

Responsibility analysis

Et c.

RESEARCH, ACCUMULATION AND ANALYSIS OFINFORMATION:

1. RISK/RETURN ANALYSIS ( Project & Role Players)

Risk averter

Risk neutral

Ris k t aker

2. INVESTMENT TRADE-OFF ANALYSIS

3. FINANCING/INVESTMENT REQUIREMENTS

Debt/Equity ratios

Liquidity/Solvency ratios

Ownership forms

Tax strategies.

4. OTHER MONEY MANAGEMENT ISSUES

5. COMPREHENSIVE MANAGEMENT ANALYSIS

6. ETCETERA

Benchmarks

AN INTEGRATED PROJECT MANAGEMENT SYSTEM OWNER/CLIENT PERSPECTIVE- by MJF Kster

(AN INTERACTIVE PROCESS)

Project Managerand Consultant

Team

START

PM Team

DETAILED FORMULATION (REVISITING CERTAIN

EARLIER CRITERIA)

Client/Investor/Financiers real requirements

SWOT Analysis

Prioritizing and ranking of: Goals/Objectives/Needs/Wants

Revisiting Vision/Mission Statements

Strengths/Weaknesses (SWOT analysis)

Risk/Return preferences &Utility

Tax strategies

Value system, chemistry analysis & client DNA analysis E tc .

DEPARTMENTS

LINEAR RESPONSIBILITY

CHART (LRC)

X Y Z

A

B

A

B

C

A

B

ORGANIZATIONAL STRUCTURE

Standards

Industry Norms

Feasibility

study

Feasible?

Budget/Cost

expenditure plan

Formal

WBS

Capital budget

Operational budget

Life-cycle

benefit/cost analysis

Value management

Expenditure-plan-of-

action

HOWMUCH

$?

Minorchangesmight be

introduced

Blueprinting of

Client

WBS

Client

CLIENT

BRIEF

PRIMARY OBJECTIVE

Wealth Maximization

$$$$$$

NO

YES

Etc.

Constructability analysis

Required TOMS

Required Specs.

Rough WBS

Revisited Scope Def.

Revisited SOW

PRELIMANIRY

(EARLY)

STATEMENTS

AND INTENTS Statement of Work

(SOW)

Goals/Objectives

Vision/Mission

Scope definition

Very rough WBS (if

needed)

Design/Engineering Consulting

team

PROBABILITY

100

80

60

40

20

$2000 $3000

UTILITY

8

TQMS

WBS

?

VISUALIZING/CONTEMPLATING

Project Idea/Concept/Brainwave

Need/Want/Desire/Requirement(s)

Expansion/Market gap/Market niche

New product/Patent, Etc.

Take-over/Merger/Swopetc.

O ther


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10 20 30 40(Major Component

Level)

11

12

21

22

13

31

32

41

42

43

44

(Task

Level)

Detailed SOW

Detailed plans& Specs

Design/EngineeringConsultants

Etc.

Work Packages

Networks

Time/Cost/

Performance

SCHEDULING

Gantt Charts

PERT

CPM

Etc .

Schedule N

Schedule 2

Master Schedule

Estimates

Other

Manpower

Contractors

& Subcontractors

THE

CONSTRUCTION

PROCESS

Debugging

Pre-Planned

Termination

Control and

Payment Certificates

Interpretation

Terminate

Flow Chart

10

20

30

11

12

13

21

22

31

32

A B A B

ORG

WBS

X Y

Linear ResponsibilityChart

WBS

On Time

Within budget

Within

Performance

Expectations

(TOMS)

Benchmarks.

Standards

Industry norms

Material

Budget update

Project ChangeManagement(Control)

Formatting

Go to clients

databank at

Start - Save

for future

planning

purposes

Control

Progress

payments

Final

account

The

How

?

Project

Plan

Evaluation

Consultants

Bid

evaluation

Negotiations

Adjustments

Bid

acceptance

Asking for

Bids

Claims

settlement

Operation

Post Mortem

analysisStart-up

Networks

BUDGETING AND CONTROL

Time

$

Time

$

S F

S F

What is

A Project

andwhat represents

Project Management?


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Etymological derivation of certain terminology

1. Lecture Objectives and Learning Outcomes

To define projects and project management (P.M)

To analyze their uniqueness

Identify the differences between P.M. and continuousoperations

To truly understand the crux of basic P.M. and projects

per SE

2. Etymological Derivation

The Latin Proicio and Inceptium

to throw or cast forward

The Latin Manus and Manu Pularo to physically do or do by hand

Summary:

Something physically to happen in the future!


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3. What is a project?

A project generally exhibits most of the following conditions:

A project is homogeneous

A project is finite

Usually complex

It is unique

Non-repetitive

Requires multiple resourcesfrom a finite resource pool It is the contraor 180 opposite of a continuing

operation

A group of tasks (activities) performed within adefinable time period (schedule) in order to meet a

specific set of goals/objectives (performance) within abudget (cost plan)

4. The So-called P.M. Triangle

TIM

ECO

ST

PERFORMANCEincluding QUALITY


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5. P.M.Contrasted with a continuous operation

(say a production line)

PROJECTS VERSUS OPERATIONS

PROJECTS OPERATIONS(CONTINUOUS SYSTEMS)

Unique Repetitive Finite Eternal (ongoing)

Revolutionary change Evolutionary change

Uncertainty

Steady state

(a project)

Virgin ideaUncertainty

Contractor Client/Design

TeamWorkers Management

Uncertainty


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PROJECTS VERSUS OPERATIONS (continued)

PROJECTS OPERATIONS(CONTINUOUS SYSTEMS)

Unbalanced forces (objectives Quasi-balanced forces indisequilibrium) (objectives more or less in

equilibrium)

Transient resources Stable resources

Success highly visible Success less visible

Tasks are newly formulated Tasks well defined (standardtask)

Emphasis more on effectiveness Emphasis more on efficiency

Uncertainty Certainty More or less certainenvironment

Generally more emphasis on Generally more emphasis on

goals roles

6. Self-test Questions

6.2 Please define a project in your own words

6.1 Please identify a list of projects you have been involvedwith (or which you can envisage)

6.3 What other quantitative (excluding quality) as well as

qualitative dimensions (criteria) could be included in theterm performance (third leg of the P.M. triangle) ?

6.4 What do you think is easier to manage:

a major project

a large production line? (Please give reasons anddiscuss)


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BASICVERY

PROJECTMANAGEMENT

INTEGRATED

MODEL

Start

Rough(Pre-liminary

StatementOf Work)

Owner/client

ProjectManager and

ConsultantTeam

Idea

Creation/

Identification

needwantfacility expansionnew productmarket niche/gapbrain wave/patentmerger/take overby default/courtetc.

goalsobjectivesvisionmissionSWOT [SOW]

Rough ScopeDefinition

specs

rough schedule

rough budget

norms/standards/benchmarks

FeasibleOK?

FeasibilityAnalysis

N

Final SOWandScope Definition

yes

Work

BreakdownStructure

CEO

Organizational Structure

etc

XY

Z

LinearResponsibility

Chart (LRC)

ResourcePool

(7 Ms)

Work Packages

Network Schedules

S F

Materials and

Resource Lists

(Requirements)

Bidding/Tendering/

Negotiation andAcceptance

Construction

Measurement

and Control

including

Progress

Payments

Bid/TenderDocumentation

Handover,

Debugging

Commissioning/

Start-up

Final Account

Hopefully NoArbitration,Litigation or

ADR!

Feedback,Data

Reworkand

Storage

End

x y z


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Start

Owner/client

ProjectManagerand

ConsultantTeam

needwant facility expansion new product

market niche/gap brain wave/patent merger/take overby default/court etc.

IdeaCreation/

Identification


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Rough(Pre-liminaryStatementOf Work)

goals

objectives vision mission SWOT

[SOW]

Rough Scope

Definition specs

rough schedule rough budget

norms/standards/

benchmarks


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FeasibleOK?

FeasibilityAnalysis

N

Start

Idea

Rough(Pre-liminary

StatementOf Work)

Rough Scope

Definition

FeasibleOK?

Feasibility

Analysis

N


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Feasible

OK?

Feasibility

Analysis


yes

WorkBreakdownStructure

etc

CEO

X Y Z



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LinearResponsibilityChart (LRC)Resource

Pool

(7 Ms)

Work Packages


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s f

Network Schedules

Materials and

Resource Lists

(Requirements)


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Bid/Tender

Documentation

Bidding/Tendering/Negotiation

and

Acceptance


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ConstructionMeasurement

and ControlincludingProgressPayments

Handover,Debugging

Commissioning/

Start-up


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Final Account

Hopefully NoArbitration,Litigation or

ADR!

Feedback,Data

Reworkand

Storage

End


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Start

Rough(Pre-liminary

StatementOf Work)

Owner/client

ProjectManager andConsultant

TeamIdea

Creation/Identification

need want facility expansion new product market niche/gap brain wave/patent merger/take over by default/court etc.

goals objectivesvisionmissionSWOT [SOW]

Rough Scope

Definition

specs

rough schedule

rough budget

norms/standards/benchmarks

FeasibleOK?

FeasibilityAnalysis

N


yes

WorkBreakdownStructure

etcCEO

X Y Z


LinearResponsibilityChart (LRC)

Resource

Pool

(7 Ms)

Work Packages

Network Schedules

S F

Materials and

Resource Lists

(Requirements)


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Bidding/Tendering/

Negotiation andAcceptance

Construction

Measurementand Control

includingProgressPayments

Bid/TenderDocumentation

Handover,

DebuggingCommissioning/

Start-up

Final Account

Hopefully NoArbitration,

Litigation or ADR!

Feedback,Data

ReworkandStorage

End

Project Planning


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1. Lecture Objectives and LearningOutcomes

To understand where Planning starts

To grasp the typical components (steps) of aplanning process

To understand the linkages and interfacesbetween Planning, Organizing, Schedulingand Control

To give you an overview of different types ofplanning; i.e.: Operational, strategic etc.


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2. Introduction : Planning to Plan !

Often the single biggest problem: Wheredo I start?

At the start? Where is that? Is it the start

mode ?Start

Let us think for a moment . . .

Isnt the first question:

Where am I going?

How am I going to get there?

What am I going to do?

Where is where or there?!!

or

or

or


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Many planning gurus believe planningrefers to and answers the following

questions:

what,

who,

how

when

and

3. Defining the term Planning

Planning is that managerial activity through

which decision makers (planners) decide

pro-actively what needs to be done, or

must be achieved; how they are going toaccomplish it; when they are going to

achieve a specific goal/objective, mission or

steady state.


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In its most fundamental form it calls for the

following basic steps:

Identify and define the problem

Identify your goals/objectives

Identify and study (evaluate) thealternatives

Analyze the consequences (outcomes)

Select the best solution, and

Implement it

4. To summarize Project Planning

In most Planning situations, the planner has topose the following questions:

What has to be done?

How it has to be done?

For How much?

By Whom?

In What order?

And When?


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5. The following represent a morecomprehensive list of

general planning steps: Project goals, objectives and requirements

are set

Identify the specific work activities, tasks or

jobs to achieve

A project organization is created to be

responsible for the work activities (who

does what?) A schedule is set (prepared) showing the

logic, sequencing timing of activities

A forecast is prepared of Time, Cost &

Performance projections for successful

completion of the planned project (A unique

project triangle is created)

A budget and resource plan is prepared

showing amounts and timing of resources &

expenditures required (when money is to be

spent where?)


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Keep as is and continue

Stop

Re-plan and adjust

6. Project Control

Output is measured and compared againstplanned or re-planned

Any variance has to be evaluated andmanaged

Start

Establishgoals/objectives to

meet mission andachieve desired

outcomes


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Set specificobjectives

(quantums) toachieve required

goals/mission

Identify alternatives

(projects) required

to generate required

outputs and/or

meet objectives

Identify alternatives

(projects) required

to generate required

outputs and/or

meet objectives

Plan most viablealternative (project):

identify tasks (activities)

create logic & sequence

consider interactions

estimate durations and costs

allocate resources

incorporate uncertainties/risksand provide contingencies

create master plan


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Check/Evaluate:

Project timelines (milestones)against constraints

Project resource requirements

against availability (resourcepool within and/or outsideorganization)

Do projects matchresource and

timeline constraints?

NO

YES

Create corporate

anddivisional plans

Do these matchstrategic intent?

NO

YES

Continue


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Start

Establishgoals/objectives tomeet mission andachieve desired

outcomes

Do projects matchresource and

timeline constraints?

NO

Plan mostviable

alternatives(project)

Check/Evaluate

Identifyalternatives(projects)required

Set specificobjectives

Establishgoals/objectives

YES


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Do projects match resource

and timeline constraints?

NO

Identifyalternatives(projects)required

Set specific

objectives

Establish

goals/objectives

Check/

EvaluatePlan most

viable

alternative (project)

Start

Create corporate

and

divisional plans

Do these match strategicintent?

YES

Continue

NO

A BASIC OPERATIONALAND STRATEGIC PLANNING

INTERFACING PROCESS

7. Operational Plans

These are often called housekeeping plans

- the short-term how-to-do plans

They generally cover a period of one year

(business / tax year) or until project is

complete and ready for start-up

They often run concurrently with Profit and

Loss accounts (tax years)

Typically generated by middle managers

/operational managers (needing top

management approval /blessing)


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8. Strategic Plans

Commonly covering a period of 5 years and

more (often the entire project/product life

cycle)

Sometimes referred as Long-Range plans

and strongly focus on capital expenditure

They typically reflect the strategic intent

(mission/vision) of where the

organization/project/product is heading or

aiming for. They are typically generated by top

management/board of directors

9. Ten rules that Randolph and Posnersuggest for creating a good project plan

The rules for planning success are not the

preserve of a divine few - they apply to all.

Randolph and Posner developed the

following ten rulesknown as:

Go-carts

Driver


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1. Set a clear goal2. Determine the objectives3. Establish checkpoints, activities, relationships and

time estimates4. Draw a picture of the venture or project

settlement

G+O+C+A+R+T+S = GO-CARTS

The underlined letters in the first four rules spellGo-carts. This is the acronym for creating a goodplan. Effective managers create good plans - Go-carts- to get them from the start of the race tothe finish line.

Even the best-build Go-carts, however, will notproduce a winner without a skilful driver. Andthats hat the underlined letters in the last sixrules spell: Driver. This is the acronym for whatneeds to happen as you implement your plan, notnecessarily in a particular order but as required inthe life of the project or venture. When you knowhow to build effective Go-cartsand how to be askilful Driver, you can get your projects orventures over the finish line without crashing.


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5. Direct people individually and as a team6. Reinforce the commitment and excitement of

the team7. Keep everyone connected with the project or

venture Informed

8. Build agreements thatVitalize team members

9. Empower yourself and others on the team

10. Encourage Risk taking and creativity

D+R+I+V+E+R = DRIVER

10. Some Planning Statements

Failing to plan is planning to fail

All planning is concerned with the future or

future directed

Planning is a trap laid to capture the

future

Planning is the avoidance of fire fighting

Planning is the starting point of all

managerial action

Planning is the simulation of a required

future


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11. Self-Test

11.1 Please give your own definition of the term

Planning______________________________________

______________________________________

______________________________________

______________________________________

11.2 What do we mean by a Failing Plan? Is it

irreversible? Please discuss.

____________________________________________________________________________

______________________________________

______________________________________

BASICSTEPSOF

DECISIONANALYSIS


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BASIC STEPS OF DECISION ANALYSIS(PROBLEM SOLVING)

1. START

2. RECOGNIZE AND IDENTIFY A NEED, PERCEIVED NEED,REQUIREMENT, MARKET DEMAND, PROBLEM, ETC.

3. DIAGNOSE THE SITUATION.

4. JUSTIFY AND DEFINE THE SITUATION

5. ESTABLISH VALUE SYSTEM(S), GOALS AND OBJECTIVES(FOR COMPARISON/EVALUATION)

6. GENERATE AND SYNTHESIZE FEASIBLE ALTERNATIVESOLUTIONS

7. ANALYZE ALTERNATIVES8. COMPARE AND EVALUATE ALTERNATIVES

9. SELECT BEST ALTERNATIVE

SUMMARY

BASIC STEPS OF DECISION ANALYSIS(PROBLEM SOLVING) (Continued)

10. IMPLEMENT DECISION

11. MONITOR DECISION

12. EVALUATE (AUDIT) DECISION (POST MORTEM)

13. STORE (SAVE)

14. END


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PM KEY POINTS &PROBLEM AREAS

A PRELUDE TO FUTURE PM

THE SO-CALLEDPM TRIANGLE

TIME

MONEY

QUALITY (PERFORMANCE)


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TIME

COST

Note that we will spend more time on this triangle later on during the course.

PERFORMANCE

Many PM Experts believe that any uniqueproject can be defined by the differentlengths of the so-called sides or legs of atriangle; these sides beingTime/Money/Performance

Others maintain that if we were able toquantifyin monetary terms (say $s) allresources employed for the successfulcompletion of a project, the area of thatunique triangle would represent the $quantum of total resources employed


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Total Resources are generally referredto as the 7 Ms:

Minutes (Time)

Money (Finance/Investment/ Cost)

Manpower (Men/Woman Power)

Machines

Materials

Methods (Tools, Techniques)

Metres (Working Space/ Confined Space)

What is meant by the termTotal Resources?

Let us, for the moment, focus on the 3sides of the triangle What is meantby the terms:

Money

Time

Performance?


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Every project represents aunique triangle & everyproject owner needs orrequires a unique triangle

Project A = FA (Time, Money, Performance)

OwnerA = FA (Wealth Delivery Components I-J)

If, for whatever reason (say for instance change orders,etc.) the final triangle differs significantlyfrom theoriginally tendered (bid) triangle, there might besignificant legal implications

A. = ORIGINAL

(at signing of the agreement/contract)

B. = FINAL

(at completion)


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INDIVIDUALIZED WEALTHMAXIMIZATION Not only Profit!

Owner/Client DNA/Chemistry Analysis

True needs vs wants

Profiling Owner/Client for WBS creation


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PRE-PROJECT (UP-FRONT)

ACTIVITIES

Real Money is made/destroyed up-front

Dinky Toy Moneyis invariably madedownstream

Human nature naturally wants to fixproblems downstream (after the effect)

THE FUTURE NEW BREED/NEWGENERATION PROJECT MANAGER WILL

MOST LIKELY BE KNOWN AS:

HOMINIS SAPIENTIS EST ADMINISTRARE

CREANTI INCERTUM FUERIT MODO

INFORMATIONEM


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A Project Manager must not onlybe able to manage theengineering, procurement and construction aspects of a

project, he or she must also be able to manage aspectsrelating to finance, investment, taxation, cost engineering,schedule, environmental considerations, regulatory agencyrequirements, inflation & cost escalations, labourproblems, public & client relations, employee relations andchanging laws. Thats primarily on the domestic side. Oninternational projects, the list of additional functions &considerations adds totally different complications

The King Pin

Central point of integrated responsibility

Can never be appointed too early!

Position within the organization?

As close as possible to the CEO. preferably the CEO!

Lately everyone is becoming a so-called Project Manager

Project Management as Management System:

Fastest growing form of management (worldwide)

The onlyform of management that integrates strategic-, middle- &entry level management over an entire Project Life Cycle

PM actually provides all the essential Building Blocks for strategic

management Actually for all future types of management


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All businesses/ventures/products start asProjects

In essence there are only 3 types ofmanagement

Continuous Systems

Projects; and

Batch

High Tech / Future Tech?

Design/Engineering drawing boards are slowly closingon micro technology & opening up on nano technology


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DUST MITE UNDER ELECTRON MICROSCOPE

Life Cycles are becoming extremely short

Shelf lives of high tech projects oftenmeasured in months

Future?: Weeks or Days?


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More or less same management tools/techniquesapplicable to all types of business

Only the density of application per life cyclephase that changes significantly

Compare the building of a Dam with a broadband Fibre Optic Networking System

Ever-changing SOW & Scope definitions in a world of rapidchange

Do specific & comprehensive ones really exist?

If so, do they survive (creep, etc.)?

Is the focus on inputs or outcomes?

STATEMENT OF WORK (SOW) AND SCOPE DEFINITION OFWHAT IS KNOWN AS A WOMAN

(DEFINITION CREATED BY A MAN)

SOW (QUALITATIVE AND SOMEWHAT VAGUE)

ONE OF TWO MAJOR TYPES OF THE HUMAN RACE,

UNIVERSALLY KNOWN AS FEMALE. BODY TISSUE AND FLESH

GENERALLY SOFT. ON AVERAGE NOT TALLER OR HEAVIER

THAN THE OTHER COMMON SPECIE, KNOWN AS MALE. MOST

FEMALES STRIVE TO BE ATTRACTIVE, SOMEWHAT

ORNAMENTALAND HIGHLY DESIRABLE TO REAL MEN.


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Accepted as 55kg, but known to vary from 45 kg to 225 kgATOMIC MASS:

AdamDISCOVERER:

SYMBOL:WomanELEMENT:

SCOPE DEFINITION (MORE SPECIFIC AND QUANTITATIVE)

HAZARDOUS MATERIAL DATA SHEET

PHYSICAL PROPERTIES

1. BODY SURFACE NORMALLY COVERED WITH FILM OFPOWDER AND PAINT

2. BOILS AT ABSOLUTELY NOTHING FREEZES FOR NOAPPARENT REASON

3. FOUND IN VARIOUS GRADES RANGING FROM VIRGINMATERIAL TO COMMON ORE

CHEMICAL PROPERTIES

1. REACTS WELL TO GOLD, PLATINUM AND ALL PRECIOUS STONES

2. EXPLODES SPONTANEOUSLY WITHOUT REASON OR WARNING

3. THE MOST POWERFUL MONEY REDUCING AGENT KNOWN TOMAN

COMMON USE

1. HIGHLY ORNAMENTAL, ESPECIALLY IN SPORTS CARS

2. CAN GREATLY AID RELAXATION

3. CAN BE A VERY EFFECTIVE CLEANING AGENT

HAZARDS

1. TURNS GREEN WHEN PLACED ALONGSIDE A SUPERIORSPECIMEN

2. POSSESSION OF MORE THAN ONE IS POSSIBLE BUT SPECIMENSMUST NEVER MAKE EYE CONTACT


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When Toyota decided to build the Lexus, they selected their top2,000 design engineers and other consultants, and instructedthem to build the worlds finest luxury sedan.

They further stated that this luxury sedan should directly competewith the Mercedes S-class, the BMW 7-series, the Jaguar X-range, the Cadillac and other similar luxury sedans (they did notsee Rolls Royce and Bentley as benchmarks due to their oil leaksand outdated technology!)

Furthermore, it should be the most reliable of all cars, as well asthe quietest. The Lexus should also be the benchmark for

maintaining market value, and Must be market ready within two years, mainly focusing on the

U.S. market.

SOW AND SCOPE - TOYOTA LEXUS SEDAN

Statement of Work (SOW)

4 Door sedan, accommodating 5 grown-ups in cutting edge luxuryand safety, obtaining the highest Auto Motor und Sport safetyrating.

200-220 Kw @ about 5,500 rpm

Torque of about 450 Nm @ 3,200-3,400 rpm Maximum speed 230-250 Kph

Weight 1,500-1,650 Kg

Cost $40,000-$45,000

Must be the worlds finest

SOW AND SCOPE - TOYOTA LEXUS SEDAN

Scope definition


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Change orders (engineering instructions)

The mother of all PM sin?

Which critical path should we manage?

The so-called official one?

Risk/uncertainty?

What happens after the matrix organization (whenthe project has been completed?)

POST MORTEM ANALYSIS

Is it really ever being done?

Into file 13

Keeping fresh of information not data!

Feedback Systems (loops) for decentfuture planning?


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MANAGING THE TAX MAN

MANAGING THE TAX MAN


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MANAGING THE TAX MAN(YOUR

CONSTANT BUSINESS PARTNER)Short fictitious tax shieldCase StudyPicture the following scenario:

New York based Mr George Sorros, plans to develop a $13 billionpetro-chemical plant in Dubai. Mr Sorross London basedcorporation, ABC, is going to own it. The project will consist of an$11 billionplantand a $2 billion brick and mortar component.

Mr Sorros and his advisors have seriously studied U.S./British/Islamic tax laws and treaties and wanted certain unique clauses to benegotiated into the agreement between ABC and the Contractor.

Mr Sorros is currently negotiating with Fluor and Bechtel, and they

are discussing the terms of the future agreement (It is a so-calledBuyers market and Mr Sorros can dictate). Mr Sorros has carefullyanalized ABCs expected future lean and fat years, and wants tosynchronizeplant delivery and legal ownership with Pert scheduleand tax year.

Short fictitious tax shieldCase Study (continued)

Mr Sorros is adamant that there should be a clause in the agreementstating that legal ownership passes to ABC the moment the bulk oftheplant is delivered to the jobsite. Contractor is highly upset:What about risk and insurance liability? Sorros: Not to worry, I havea longstanding relationship with Lloyds in London --- I will take careof the insurance . It is only costing me $100 m!! Contractor

agrees.ASSUME: A 20% p.a. reducing balance depreciation allowance onplant(according to tax treaties and Roman Dutch/English/Islamic taxlaws)

QUESTION: By inserting a single clause, what has Mr Sorros

earned?


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Finish for thetime-being

Justification for PM1

Documents

Transcript of Justification for PM1