M1A1 Project Selection Management Skills Project Selection & Management Skills IT390: PROJECT MANAGEMENT JUN2021 30076440 Analysis of Project Selection Methods Net Present Value Analysis One advantage of NPV is
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M1A1 Project Selection Management Skills Project Selection & Management Skills IT390: PROJECT MANAGEMENT JUN2021 30076440 Analysis of Project Selection Methods Net Present Value Analysis One advantage of NPV is that it takes into account the concept that future money is worth less than money today. Of course, there are drawbacks to NPV, one of which is that it requires some guesswork in terms of capital costs. Additionally, the NPV method is not the most effective for comparing projects of varied sizes because its outputs are mostly monetary in nature (Schwalbe, 2015). Payback Analysis The simplicity of payback analysis is widely valued by smaller firms that demand a shorter payback period to lower their risk of loss. Its downside is that it fails to take into account cash inflows that come after the payback period, making it impossible to compare the profitability of one project to another (Schwalbe, 2015). Weighted Scoring Model The WS model has the advantage of providing a visual depiction of project scores based on many sets of criteria. The downside is that it is dependent on the relevancy of the chosen criteria and the correctness of the weight assigned to them (Blumhorst, 2013). This is the model I used in my selection process because none of the others were appropriate for my project. Return on Investment The benefit of ROI models is that they are routinely used to convey an opportunity to others and act as standardised measures for analysing the financial efficiency of investment. One . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . .. . . . .
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