The Quantum Leap Company has set up a weighted scoring matrix for the evaluation of potential projects Below are five projects under consideration Using the scoring matrix below, which project would you rate highest Lowest If the weight for Strong Sponsor is changed from 2 0 to 5 0, will the project selection change What are the three highest weighted project scores with this new weight Why is it important that the weights mirror critical strategic factors Two new software projects are proposed to a young, start up company The Alpha project will cost $150,000 to develop and is expected to have an annual net cash flow of $40,000 The Beta project will cost $200,000 to develop and is expected to have an annual net cash flow of $50,000 The company is very concerned about its cash flow Using the payback period, which project is better from a cash flow standpoint Why (A) Assume that the rate of inflation is 6 , use the Net Present Value (NPV), approach to calculate the payback period for both projects Which project would you now recommend Why (B) In your estimation, which approaches to calculating the payback period is better Explain your response, giving the pros and cons of each approach Project 3 6 Project 1 9 Weight 2 Project 5 3 Project 4 1 Project 2 3 O OO N O O Co Criteria Strong Sponsor Support Business Strategy Urgency Sale From new Products Competition Fill Market Gap Weighted Total (a) Weighted total DO N NO CO OO

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The Quantum Leap Company has set up a weighted scoring matrix for the evaluation of potential projects. Below are five projects under consideration. Using the

The Quantum Leap Company has set up a weighted scoring matrix for the evaluation of potential projects. Below are five projects under consideration.

Using the scoring matrix below, which project would you rate highest? Lowest?
If the weight for "Strong Sponsor" is changed from 2.0 to 5.0, will the project selection change? What are the three highest weighted project scores with this new weight?
Why is it important that the weights mirror critical strategic factors?
Two new software projects are proposed to a young, start-up company. The Alpha project will cost $150,000 to develop and is expected to have an annual net cash flow of $40,000. The Beta project will cost $200,000 to develop and is expected to have an annual net cash flow of $50,000. The company is very concerned about its cash flow. Using the payback period, which project is better from a cash flow standpoint? Why?

(A) Assume that the rate of inflation is 6%, use the Net Present Value (NPV), approach to calculate the payback period for both projects. Which project would you now recommend? Why?

(B) In your estimation, which approaches to calculating the payback period is better? Explain your response, giving the pros and cons of each approach.

Project 3 6 Project 1 9 Weight 2 Project 5 3 Project 4 1 Project 2 3 O OO N O O Co Criteria Strong Sponsor Support Business Strategy Urgency Sale From new Products Competition Fill Market Gap Weighted Total (a) Weighted total DO N NO CO OO