Financial analysis and risk assessment of officebuilding project between subsidiaries of FPT corporation

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FINANCIAL ANALYSIS AND RISK ASSESSMENT

OF OFFICE BUILDING PROJECT

BETWEEN SUBSIDIARIES OF FPT CORPORATION

By

HUỲNH PHÚC DUY

Submitted in partial fulfillment of the requirements for the degree of

Master of Business Administration (MBA)

at the

SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT

and

HO CHI MINH CITY OPEN UNIVERSITY

December 31st 2011

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DECLARATION

I hereby declare that this paper submitted in partial fulfillment of the MBA degree

is my own work and that all contributions from any other persons or sources are properly

and duly cited. I further declare that it does not constitute any previous work whether

published or otherwise. In making this declaration I understand and acknowledge any

breaches of the declaration constitute academic misconduct, which may result in my

expulsion from the program and/or exclusion from the award of the degree.

HCMC, December 31st, 2011

HUỲNH PHÚC DUY

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ACKNOWLEDGEMENTS

To mom and dad, this is a good chance for me to express my acknowledgement for

your love and education. Thank you mom and deceased dad, I love you so much.

Thank you honey, my wife, for your sympathy and support during 2-year course as

well as the research semester.

I also would like to highly appreciate for all people who support and help me to

finish this research, especially Dr. Nguyen Tan Binh, my thesis tutor, Mr. Trinh Ngoc Bien,

Chief accountant FPT Land Co. and other classmates.

Again, thank you very much!

HUỲNH PHÚC DUY

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EXECUTIVE SUMMARY

The purpose of this research is to determine the feasibility of cooperation between 2

companies. That is to build a 15,000-square-meter office building and rent it to the land

owner for a certain time after handover back. This cooperation is specific because

stakeholders are subsidiaries in same corporation. However, distinction of 2 profit￾motivated business units might lead the lessee to refuse unreasonable lessor’s proposal.

The project is on the stage of negotiation that terms and conditions are not fixed yet and

Detailed Drawing are not issued.

The research could help decision-maker to determine the lease factors for

negotiation, to understand uncertainty of result, to see how input and output are related.

Financial analysis of the project is conducted by building excel financial model based on

assumptions from experience of other projects. Risk assessment is carried out by

sensitivity analysis on the model and forecast simulation using Crystal Ball software. The

summary of this research are condensed in the following page.

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SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT

HO CHI MINH CITY OPEN UNIVERSITY

Master of Business Administration (MBA)

MBA THESIS ASSESSMENT

Dear: Board of Thesis Evaluation

Academic Year: 2011 - 2012

Topic:

FINANCIAL ANALYSIS AND RISK ASSESSMENT OF

OFFICE BUILDING PROJECT BETWEEN SUBSIDIARIES

OF FPT CORPORATION

Student:

HUYNH PHUC DUY

In term of the contents, the thesis has presented a subject, which was, agreeably

appropriate to the current condition within the area of project appraisal – public sector as

well as private sector.

To the exact, the enquiry focused mostly on the assessment of the financial advantages and

the possible risks occurred within certain projects. In which, the student has done such

important jobs as searching for data, analyzing markets and interpreting some of the

riskiest factors experienced by, for example, a real-estate project or more specifically,

rental office segmentation.

The student has shown off his knowledge achieved during his time spent studying and

investigating with Solvay Brussels School. This was proved by the ways he designed his

research or collected useful data, as well as the ways he applied scientific criteria to