Student Common Room: Financial Management

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Student Common Room: Financial Management Undertaking a project such as the proposed new Student Common Room requires careful financial planning and management, involving a range of details related to resource capabilities and project demands (Shim & Siegel, 2008; Brigham & Ehrhardt, 2010). Deciding whether or not to move forward with a project must also include an assessment of opportunity costs weighing the cost of a project against the other things that could be accomplished with the same resources and considering issues such as economies of scale and other cost behaviors is also necessary (Brigham & Ehrhardt, 2010; Moya, 2012). These and other cost related theories are directly relevant to the proposal at hand, which will necessarily come at a substantial cost that is not necessarily warranted given the benefits the project will lead to and the existence of cheaper alternatives. Because the proposed renovation and construction will only be for one room, the savings achieved by economies of scale will not be realized, meaning that variable costs will be at their highest rate, and cost overruns are more likely in this single project as there will be fewer project phases to carry excess materials over to (Shim & Siegel, 2008; Brigham & Ehrhardt, 2010; Moya, 2012). When it comes to opportunity costs, there must be a weighing both of benefits and costs. With a suitable room already available for the proposed purpose, the resources that will have to be committed will not
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