PMP courses: project selection Measurement - PMP

الجمعة، 30 يناير 2015

project selection Measurement

Benefits Measurement project selection methods involve comparing the values of one project against another. There are the following type of Benefit Measurement project selection techniques -

Murder Boards - This involves a committee asking tough questions from each project
Scoring Models - Different projects are given scores based on certain defined criteria. Project with higher score is selected.
Benefits Cost Ratio - This technique involves computing benefits to cost ratio (BCR) for a project. Project with higher BCR is selected.
Payback period - This technique involves considering how long it takes back to "pay back" the cost of the project. Inflation or interest earned in not considered in this technique. A project with lower pay back period is better.
Discounted Cash Flow - This technique takes into account the interest earned on the money. The Future Value (FV) of projects is compared.
FV=PV(1+i)ⁿ
PV is the present value of the project. A project with higher present value is better.
Internal Rate of Return (IRR) - A project that has higher IRR is better, as it is giving higher return on money.