Project Selection – Murder Board
‘Murder Board’ might not really sound like a Project Selection Process but then again it is meant to be more of a Project ‘Rejection’ Process. The Murder board is basically …
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Project Selection – Internal Rate of Return
Definition Internal rate of return (IRR) is the interest rate at which the cash inflow and cash outflow of the project equals zero. You don’t have to understand that! Sample …
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Project Selection – Benefit-Cost Ratio
Definition Benefit-Cost ratio is the ratio of the benefits of a project compared to the costs calculated in terms of Present Value (PV). BCR > 1 – the project is …
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Project Selection – Opportunity Cost
Definition Opportunity Cost is the highest value a person needs to give up for the selected choice. For example, if you have US $10, you can either buy a coffee …
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Project Selection – Return on Investment
Definition Return on investment (ROI) is the benefit an investment bring about, by comparing profits in relation to capital invested. Sample Question An organization is considering several projects with the …
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Project Selection – Payback Period
Definition Payback Period is the time it takes for the organization to earn back the initial investment (in terms of monetary cost) to the project and begin making profits. Sample …
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Project Selection – Net Present Value (NPV)
Definition Net Present Value (NPV) of the sum of all cash inflows (in Present Value) of the project minus the initial cost, i.e. PV (benefits) – PV (costs) (Read more) …
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