Application Case

The Human Resource Manager

and
Managing Multiple Responsibilities

Answer to Question 1

1. Out of numerous activities of Human Resource Management Sam’s schedule illustrated

following areas on the particular day:

a. As a human resource manager of the Lakeview plant of Supreme Textile

interviewed several applicants before and offer lunch as a HR management activity.

b. Sam solved the problem of payroll management of the system.

c. Sam had been trying to find out a secretary for the plant manager as a
recruitment process.

d. As a good HR manager Sam found out a person for Al Noren, the stockroom
foreman.

e. Sam attended a staff conference for the quality control of the factory.

f. Sam gave some time from busy schedule for assembling some files regarding
employee grievances.

g. Sam attended a conference regarding production with production superintendent.

h. Sam attended another meeting at the late hours of the office time with personal
management at the eastern plant regarding employee matters.

Answer to Question 2

2. The following are the areas of ineffective management and time robbers. that were
affecting Sam:

a. plant engineer Cecil Hardy came to Sam’s office when he was taking interview to
the applicants and discussed about person benefit and golf game that he played on
Sunday afternoon.

b. Sam attended staff conference at 10.45 regarding quality control which was a
part of his managerial Job but the extended time of the conference was ineffective for
him.

c. Sam spent some time to find a Boy Scout troop selling advertisements in a
program for a rally they were putting on.

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Answer to Question 3

3. As we see in the paper, Sam Lennox, started his career with Supreme Textile
Corporation’s eastern plant initially in the staff appointment. Through his hard working and
strong managerial capability he become the human Resource Manager. After scrutinizing
Sam’s daily schedule we may conclude saying that, he is not yet fit to be promoted to the next
rank.
As a manager he was unable to properly look after and implement the project of his
Boss the MBO (management by objectives) in the company.

Sam could not also look after some grievances of the employees at proper time which
was being identified by Glen Johnsor, Corporate vice president of personnel. He used to keep
a lot of back loads regarding employee’s welfare and grievances which is not expected by a
manager.

Considering all the incidents I suppose, Sam need were time to concentrate himself on
the job and be more accustomed with problem solving to be promoted.

I, therefore, recommend that, he may be promoted later, only after he has improved
upon his lacking.

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 ROYAL ROADS UNIVERSITY, CANADA
THE PROGRESSIVE MERITOCRACY LTD
CHITTAGONG CAMPUS

INDIVIDUAL ASSIGNMENT

SUBJECT: Application Case

The Human Resource Manager and
Managing Multiple Responsibilities

SHRM
FACULTY: DR. MD. FASHIUL ALAM

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 PREPARED BY: MAJOR MD SHAWKAT ASHRAF SIDDIQUI

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CAPITAL BUDGETING

1. Capital expenditure Decision : It is taken on, a. Fined assets b. Assets that provide
services for long tram.

2. Capital expenditure requires an appraisal of following :

a. Technical b. Environmental c. Financial
appraisal appraisal appraisal

Appraisal is a process.
3. Financial process includes following steps :
a. Identifying arailalele set of opportunities for investment .
b. Collecting financial data.
c. Evaluation of each alternative lry employing capital ledgering techniques.
d. Acceptance of project on risk and return.
e. Adjustment/revision.
f. Allocation of funds for implementation (capital rationing).

4. Definition. Capital fidgeting is a technique of allocating funds for lang term on risk
and return.
Again
It is a method of
a. Identifying available set of opportunities for investment.
b. Collecting financial data.
c. Evaluating each alternative.
d. Accepting project on risk and return.
e. Adjusting / Revisioning.

5. The techniques of Capital Budgeting are:

a. Traditional technique (do not consider time value of money).
(1) Accounting rate of return.
(2) Payback period.
(3) Payback reciprocal.
b. Discounted Cash Flow Technique (Do consider time value of money)
(1) Present Value Technique.
(a) Total present value.
(b) Net present value.

(2) Present Value index.

(a) Total present value index.
(b) Net present value index.
(c) Present value payback period.
(d) Internal rate of return (time adjusted rate of return)
(e) Cost benefit analysis technique.
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6. Application of Capital Budgeting are :
a. Fresh project:
(1) Manufacturing / service oriented plant.
(2) Acquiring fined assets.
b. Make or lruy decision .
c. Lease vs out right purchase vs purchase with bank lone.
d. B-Balancing.
M-Modernizing.
R-Replacing.
E-Expanding-vertical or horizontal.
e. Selecting Equipment-labor intensive vs capital intensive.

7. Importance of Capital Budgeting.

a. It effect profitability significantly .
b. Project cannot be reversed without involving huge amount of losses.
c. Project is for long term, not for short term, therefore, any unexpected change
cannot be accommodated.
d. Project involves risk and uncertainty relating to future vulnerability relating to –
- Future cash flow.
- Future vulnerability.

8. Consideration or Dales for math

a. Initial Cash Out flow (I)
b. Annual Cash In flow (Ci)
c. Investment Period (N)
d. Discount Rate.

CAPITAL BUDGETING PRACTICE

1. Initial Cash Out flow (1) :
Purchase of Assets
+ Freight #
+ Tariff #
+ Commission #
+ Installation Cost #

2. Annual Cash Inflow

Sales : #
- Cost of sales excluding : #
Depreciation
Annual cash inflow : ##
- Depreciation : #
Net profit before paying tax : ##
- Tax : #
Net profit before paying tax : ##
+ Depreciation : #
Annual cash inflow : #
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3. Depreciation Methods :
a. Straight line method.
b. Reducing balance method.
c. Sum of the years digit method.
d. Double declining depreciation method.

MATH
Problem-1
1. Data :
A. Initial Cash Out flow (I) = tk 22,000/-
B. Annual Cash Inflow (Ci) = 5,000/-
C. Economical life (N) = 10 years.
D. Salvage Value = 0

2. Requirement-1 Accounting Rate of Refern (ARR)

ARR =
Net profit x100(%)
Initial Inverstment
(Based on Initial Investment)

We know that,
Net profit = Annual Cash Inflow
- Depreciation
= tk 5000-tk 2200
= tk2800

Here, Depreciation
= Cost – Salvage Value
Economic Life

= 22,000-0
10
= tk 2200/-
So, ARR = 2800 x100(%)
22,000

= 12.73
Again, ARR
=
Net Profit x100(%)
Average Investment
(Based on average investment)

We know that Average Investment = Cost – Salvage Value

2

+ Salvage Value + Working Capital

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 = 22000-0 +0+0=11,000
2

So, ARR = 2800 x100(%)=25.45%

11,000

3. Requirement - 111

Payback Period = I years

4. Requirement - iii
Net Present Value =
We know that,
Total Present Value
5. Requirement - iv
Internal Rate of Return :
Return.
Ci
= 22,000 = 4.4 years.
5000
Total Present Value
- Initial Investment
= Present value of cash inflow
= Annual cash inflow x pv of tk
C 16% for 10 years.
= 5,000/- x 4.8332
= tk 24,166/-
The rate of return, at which NPV = O, is called Internal Rate of

Step-1: Factor = I = 22000 = 4.4

C, 5000

On scrutiny as are found the factor lying between 18% and 19% to determine internal rate of
return , we are to emplay interpolation technique as follows :

Discount Rate PVF PVF

At Lower Rate 4.4941 4.4941
At true rate 4.4
At higher 4.339
Δ =0.0941 Δ2= 0.155

Step-ii Δ Means difference

Internal Rate of Return (IRR) = LR + Δ1 (HR-LR)

Δ2
= 18 + 0.094 (19-18)
0.155
=18+0.61%
= 18.61%
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Problem-2
1. Data
Initial Cash Outflow (1) = 11,000/-
Annual Cash Inflow (Ci) = 28,000/-
Economic life (N) = 10 Years
Salvage = 0
2. Requirement -i
Payback Period = I = 11000 =3.92 years.
C, 2800

3. Requirement - ii

a. We know net present value = Total asset value –Initial Investment

Here, total asset value = Present value of Cash Inflow
= Annual Cash Inflow x pv of tk 1@ 14% for 10
years.
= tk 2800+5.2161
= 14605

So NPV =14605-11000=3605
Opinion the net Present value is positive so the project is acceptable.
b. Internal rate of return : The rate of return of which NPV =O, is called
internal Rate of Return (IRR) .

Step-1: Factor = I = 11000 = 3.92=22%

Ci 2800

So the IRR is 22%

4. Requirement - iii
Accounting rate of return (ARR)
Based on initial investment = Net Profit x100(%)
Initial Investment

Here, Net Profit =Annual Cash Inflow – Depreciation

Again, Depreciation = Cost-Salvage Value
Economic Life

= 11000 – 0 = 1100
10 years

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 So, Net profit = 2800-1100=1700 tk
So, ARR = 1700 x100(%)
1100
= 15.45%
ARR (Based on Average Investment) = Net Profit x100(%)
Average Investment

Here Average Investment = Cost-Salvage Value + Salvage Value+ Working Capital

2
= 17000-0 + 0+0=5500
2
So, ARR = 1700 x100(%)
5500
= 30.90%

Problem – 3

Calculation of payback period, Bonus Life, ARR

Project Initial Cash Annual Project Payback Bonus ARR Net Profit
outflow (i) Cash Life period i/Ci Life x100(%)
Inflow (Ci) Initial Investment

A. 1,00,000/- Tk 5 years 5 years Nil 0 x100=0

20,000/- 1,00,000
B. 1,00,000/- Tk 6 years 5 years 1 yr 3333 x100 =33.3%
20,000/- 1,00,000
C. 1,00,000/- Tk 7 years 5 years 2 yr 5714 x100 =5.714%
20,000/- 1,00,000

Calculation of Net Profit, Depreciation

Net profit = Annual Cash Inflow - Depreciation Depreciation = Cost-sv

Economic life
Tk 20,000/-- Tk 20,000/- =0 1,00,000/- = 20,000/-
5
Tk 20,000/- -Tk 16,667/- = 3,333/- 1,00,000/- = 16,667/-
5
Tk 20,000- Tk 14,286/- =5,714/- 1,00,000/- = 14,286/-
7

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Analysis : Since the pay back period is same for all three projects. So, ro project can be
accepted

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