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The purpose of the study determines the research type and strategy to conduct the research, as well as the data collection techniques and analysis procedures. This study aims to explore how the practice of project finance may affect the risk management practices in projects, by focusing on the three independent variables and one dependent variable identified from the literature review. The study intensively discusses the roles of separate legal entity, financial leverage of the project, and third-party guarantees play in project risk management
|language || ||english
|wordcount || ||11410 (cca 32 pages)
|contextual quality || ||N/A
|language level || ||N/A
|price || ||free
|sources || ||40
Table of contents
1.0 INTRODUCTION 4
1.1 Background Of The Study 4
1.2 Purpose Of The Study 6
1.3 Scope Of The Study 6
1.4 Research Objectives 7
1.5 Research Question 7
1.6 Definitions Of Terms 7
2.0 THE ATTRIBUTES WHICH DISTINGUISH PROJECT FINANCE FROM OTHER FORMS OF FINANCING 9
2.1 The Sources of Project Funding 9
2.2 Project Finance 11
2.3 The Development of Project Finance 14
2.4 The Distinguishing Attributes of Project Finance 14
3.0 PROJECT RISK MANAGEMENT 15
3.1 Project Risks 16
3.2 Risk Management 19
4.0 PROJECT FINANCE 21
4.1 The Costs of Capital of both External and Internal Funds 23
4.2 The Relationship between Project Risk and Risk Management 23
5.0 MAJOR PROCESSES OF PROJECT RISK MANAGEMENT 24
5.1 Risk Identification 24
5.2 Risk Quantification 25
5.3 Risk Response Development 26
5.4 Risk Response and Control 26
6.0 Analysis And Conclusion 27
6.1 Quantiative Data Analysis 27
6.2 Qualitative Data Analysis 28
6.3 Conclusion 29
Preview of the essay: Finance Project
Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project. Project risk management includes the processes concerned with identifying, analyzing, and responding to project risk. It includes maximizing the results of positive events and minimizing the consequences of adverse events.
Generally, risk is a choice in an environment rather than a fate. BS 6079 (British Standard Institution 1996) defines risk as ‘It is the uncertainty inherent in plans and possibility of something happening that can affect the prospects of achieving, business or project goals’. The word ‘‘risk’’ was known in the English language in the 17th century. It is believed that the word was originally a sailor’s term that came from the Spanish and meant ‘‘to run into danger or to go against a rock.’’ The money spent to fund shipments overseas was the first example of risk business in the early days of travel. Each and every activity we do involve risk, only the amount of risk varies.
Consequences of uncertainty and its exposure in a project, is risk. In a project context, it is the chance of something happening that will have an impact upon objectives. It includes the possibility of loss or gain, or variation from a desired or planned outcome as a consequence of the uncertainty associated with following a particular course of action. Risk thus has two elements: the likelihood or probability of something happening ...
... projects, which is less than an ideal number for a higher degree of generalisation. As an exploratory research, this research highly focuses on only five interviewees in the qualitative section. A larger sample size would increase the explanatory power and generalisability of the results of the study. There are some data which are considered to be relevant for the study, but not available during the data collection process. For example, the projects’ board structure and organisational structure, and the details of guarantees would improve the analysis on separation of legal entity and third-party guarantees, but they are not available for most data.
Nowadays the business environment is ever changing, and new opportunities and threats keep emerging. Apart from seeking new opportunities and turning them into profits by means of project, the ways to funds the projects should also be considered and assessed carefully. The essence of project finance is to tailor-make the funding arrangements to fit the specific needs of the projects. Based on this principle, more researches concerning the detailed application of project finance could be conducted. More attributes could be explored and modified, so as to improve the effectiveness of project finance in dealing with project risks, and lower the high transaction costs involved in arranging it.
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