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A financial services company has a long list of potential projects to consider this year. Managers at this company

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Question;A financial services company has a long list of potential;projects to consider this year. Managers at this company must decide which;projects to pursue and how to define the scope of the projects selected for;approval. The company has decided to use a weighted scoring model to help in;project selection, using criteria that map to corporate objectives. All;projects selected must develop a WBS using corporate guidelines.;You are part of a team that will analyze proposals and;recommend which projects to pursue. Your team has decided to create a weighted;scoring model using the following criteria and weights;Criteria;Weight 1;Enhances;new product development 20% 2;Streamlines;operations 20% 3;Increases;cross-selling 25% 4;Has;good NPV 35%;To determine the score for the last criterion, your team has developed the;following scoring system;NPV;is less than 0, the score is 0;NPV;is between 0 and $100,000, the score is 25;NPV;is between $100,000 and $200,000, the score is 50;NPV;is between $200,000 and $400,000, the score is 75;NPV;is above $400,000, the score is 100;The following is information for three potential projects;Project;1;Scores for criteria 1, 2, and 3 are 10, 20, and 80;respectively;Estimated costs the first year are $500,000, and costs;for years 2 and 3 are $100,000 each;Estimated benefits for years 1, 2, and 3 are $200,000;$400,000, and $600,000, respectively;Project;2;Scores for criteria 1, 2, and 3 are all 50;Estimated costs the first year are $700,000, and costs;for the second year are $200,000;Estimated benefits for years 1 and 2 are $300,000 and;$700,000, respectively;Project;3;Scores for criteria 1, 2, and 3 are 0, 50, and 80;respectively;Estimated costs the first year are $300,000, and costs;for years 2, 3, and 4 are $100,000 each;Estimated benefits for years 1, 2, 3, and 4 are $0;$600,000, $500,000, and $400,000, respectively;Develop;a spreadsheet to calculate the NPVs and weighted scores for the three;projects;Use a 10 percent discount rate;for the NPV calculations

 

Paper#50755 | Written in 18-Jul-2015

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