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Project Management Module Saturday 8/8/2015 By: Suhiab Al-Khawaldah Case Study 3.2: Project Selection at Nova Western, Inc. The case is all about to choose one of two projects while the models that have been used gave a different recommendations with considering “a large developer of business software and application programs, had been experiencing a downturn in operating revenues over the past three quarters” Questions: 1. Phyllis has called you into her office to help her make sense of the contradictions in project evaluation. How would you explain the reasons for this divergence of opinion from one technique to the next? What are the strengths and weaknesses of each screening method? The main reason of the divergence in…show more content…
Project Management Module 2 Saturday 8/8/2015 By: Suhiab Al-Khawaldah On the other hand; the NVP model has a very good advantage here which is that it allows Nova to link Junus and Genmini to financial performance, better ensuring that the projects a company does choose to invest its resources in are likely to generate profit which is what Nova is caring about in current period. However it has one major disadvantage which is: the difficulty in using NPV to make accurate long-term predictions. NPV disadvantage is not effecting on the Nova, as both of the projects have short term periods. 2. Choose the project that you feel, based on the above analysis, Nova Western should select. Defend your choice. Although Project Janus offers a higher net present value for your initial investment and assuming that the company can afford the Initial Inv for both of them individually, I would prefer to suggest going for Gemini for few reasons; first, Junus will force the company to hold their money for a longer period (5 years) while in G project the periods is only three years. Second; the payback period for the project A is 3 years and for G Project is only 2.4. Third; the weighted criteria model makes clear to us that Project Gemini is the recommended one. As conclusion; I’ve added a category named as level of liquidity and anther one with short-Inv period with the same of important; but with different score
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