Pre-Assessment for Manager Budget & Business Planning

16^th May, 2023

Case Study: XYZ Construction Company XYZ Communication Nigeria Company is a Techco company specializes in providing Technology platform for Banks and Corporate organization. The company is planning to build a new Data Centre in Owo, Ondo State Nigeria and all the four CPUs must come together to produce the budget for the Data Centre. The project will take 3 years to be completed and the contractor will support the platform using Manage Service Operation for the first two years after the platform is delivered.

As the Budget and Business Planning Manager, you have been tasked with a responsibility of preparing a comprehensive budget for the project, instituting budgetary controls, and managing any potential contract price variations during the project's life. In your meeting with the CPUs, the following information were presented;

1. Contract Name: Owo Data Centre
2. Project Duration/Contract Period: January 2024 - December 2026 (3 years).
3. Purchase Order will be issued every January
4. In order to manage the Fx impact, payment will be made upfront twice in the year (January and July) and the exchange rate below (Table 1) have been agreed with the supplier.
5. It is assumed that the platform has 10 years life span.
6. 10 banks already signify interest and have signed contract with XYZ. Contract price is N100m pa (each bank) effective January 1^st, 2027
7. You have received the RFI in Table 2 below from the supplier.
   1. All Civil works will be done and completed in year 1
   2. All IDC materials will be delivered in year 2. Installation is the last phase of the project.

Table 1- Exchange Rate Table agreed with the Supplier

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2024	449	457	458	459	460	461	465	467	469	471	473	475
2025	461	465	467	469	471	473	475	477	479	481	483	485
2026	471	473	475	477	479	481	483	485	487	489	491	493
2027	485	487	489	491	493	495	497	499	501	503	505	507
2028	497	499	501	503	505	507	509	511	513	515	517	519

Table 2 (RFI received from the supplier)

	Data Centre Items
1	Annual Routine Maintenance	$265,130
2	Annual Platform Managed Service Operation (MSO)	$120,000
3	Other annual Miscellaneous Items (Operational)	$60,000
4	Project Nephos - Cloud Consumption (implemented before commissioning)	$16,308
5	Critical databases Platform (implemented before commissioning)	$160,000
6	3 plots of land for the Data Centre	$150,000
7	Civil work for IDC Phase1B Service	$254,420
8	IDC-Equipment Room_Prefab Container	$172,154
9	IDC-Power Room_Prefab Container	$172,154
10	IDC-Power Room_Battery for IT UPS	$100,351
11	Freight and Insurance (CIF Lagos, by sea)	$69,688
12	Installation and commissioning	$150,000

Task

1. Prepare
   1. Monthly Opex budget for the relevant years
   2. Capex budget for all the relevant years. 50 marks
2. What is your budgeted EBIT in the first year of operation? 20 marks
3. What is the ROI % based on the available information? 15 marks
4. What additional document will you request for if you must accept payment in advance. 5 Marks
5. Highlight steps you will take in ensuring the budget for the project is submitted for approval at due date. 10 Marks

Submit your report in a PowerPoint and all your workings in excel.

1 hour