Module 8- project selection model

Question 1

Project selection model criteria includes:

Answer 1

• Realistic
• Capable
• Flexible
• easy to use
• low cost
• comparable

Question 2

non numeric selection methods

Answer 2

they focus on selection criteria that are not limited to traditional numeric performance measures (return on investment [ROI], profit, revenue, etc.).

Question 3

examples of non numeric selection methods

Answer 3

• competitive necessity
• operating necessity
• sacred cow

Question 4

Operating necessity

Answer 4

evaluates a project based on whether it will ensure ongoing operations with the understanding that not executing the project will result in operations being interrupted.

Question 5

Sacred Cow

Answer 5

projects are suggested by senior leadership or a powerful constituent of the company. These projects are often created to satisfy the expectations of the leader with little regard for the project’s viability or contribution to strategic or operational needs.

Question 6

Checklist model

Answer 6

Checklist models are a frequently used non-numeric method for project selection. This method uses a series of questions to evaluate each potential project.
disadvantage:it becomes difficult for the projects to be compared

Question 7

Payback period

Answer 7

Payback period calculates the amount of time required to earn back the cost of doing the project. In order to calculate the payback period, you need to know the cost of the project and the amount of revenue the project will generate in future periods.

Question 8

Weighted Factor Scoring model

Answer 8

weighted factor scoring models require that senior management assigns a weight to each criterion, which places some emphasis on selected criteria when calculating the total project score.

Question 9

Net present value

Answer 9

“is a financial measure of the total future benefits of a project minus the costs of the project.
negative NPV is bad, positive NPV is good, and projects with higher NPV have greater benefits to companies.”

Question 10

Internal Rate of Return

Answer 10

evaluates potential projects as if they were financial investments.

Question 11

Discounted Cash flows

Answer 11

is a method of valuing a security, project, company, or asset using the concepts of the time value of money.