Topic Teasers Vol. 91: Calculating Benefits?

Question: Recently, my job has expanded to include helping management look into the future to calculate the benefits from investing in a project today. I vaguely remember doing these formulas to get my PMP, but to be honest I have not really used them in an actual project planning situation. Other than just the math, how do these figures help me recommend amounts that can and should be invested toward projects?

A. The economic marketplace is so dependent on stakeholder interpretations of the news and political events that it is impossible to try to predict the value of organizational projects in the future. Since 2011, businesses no longer use the present and future monetary calculations in their strategic planning.

B. When choosing projects, the one which will offer the highest return on investment is always the best one to choose. Financial value, even if it is delayed longer into the future, is always the wisest way for an organization to direct its investment dollars.

C. Present Value (PV) and Future Value (FV) can be used to see how much business value a project can provide to the organization in the future. It allows mathematical calculations to pinpoint amounts rather than just predictions of good “growth” or “return.”

D. There are many types of value for a company to consider. Each project can be focused to lead to whichever type of value is most important to the organization, but only one of four portfolio value categories for projects can be met by a single project.

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