Business assestment 1
1. Checklist.Suppose that you are trying to choose which of two
IT projects to accept. Your company employs three primary
Selection criteria for evaluating all IT projects: (1) proven technology,
(2) Ease of transition, and (3) projected cost savings.
One option, Project Demeter, is evaluated as:
Technology – high
Ease of transition-low
Projected cost savings-high.
The second option, Project Cairo, is evaluated as:
Technology-medium
Ease of transition-high
Projected cost savings-high
Construct a table identifying the projects, their evaluative criteria,and ratings. Based on your analysis, which project would?You
argue in favor of adopting? Why?
2. Checklist. Consider the following information in choosingamong the four project alternatives below (labeled A, B, C,and D).
Each has been assessed according to four criteria:
• Payoff potential
• Lack of risk
• Safety
• Competitive advantage
——————————————————————————————————————–
Project A is rated:
Payoff potential high Safety high
Lack of risk low Competitivemedium
Advantage
__________________________________________________________
Project B is rated:
Payoff potential low Safety medium
Lack of risk medium Competitivemedium
Advantage
¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬_______________________________________________________________
Project C is rated:
Payoff potential medium Safety low
Lack of risk medium Competitivelow
Advantage
_____________________________________________________________________
Project D is rated:
Payoff potential high Safety medium
Lack of risk high Competitivemedium
Advantage
Construct a project checklist model for screening these four alternatives. Based on your model, which project is the best choice for
selection? Why? Which is the worst? Why?
3.Scoring Model. Suppose the information in Problem 2 was supplemented by importance weights for each of the four assessment criteria,
where 1 = low importance and 4 = high importance:
______________________________________________________________________
Assessment Criteria Importance Weights
1. Payoff potential 4
2. Lack of risk 3
3. Safety 1
4. Competitive advantage 3
Assume, too, that evaluations of high receive a score of 3, medium 2, and low 1. Recreate your project scoring model and reassess the
four project choices (A, B, C, and D). Now which project alternative is the best? Why?
4.Scoring Model. Now assume that for Problem 3, the importance weights are altered as follows:of $30,000, $30,000, $40,000, $25,000,
and $15,000 for the next five years. Your firm’s required rate of return is 15%. How long will it take to pay back the initial
investment?
________________________________________________________
Assessment Criteria Importance Weights
__________________________________________________________
1. Payoff potential 1
2. Lack of risk 1
3. Safety 4
4. Competitive advantage 2
How does this new information alter your decision? Which project now looks most attractive? Why?
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