Discounted Cash Flow

1
Discounted Cash Flow

•      Use the discounted cash flow to calculate
  the Net Profit Value.
• The initial investment is 200,000. The project
  has lasted 60 months and the average cash brought
  in from the project per year was 30,000. The
  inflation rate was 2 for the first 3 years and
  5 for the next 2 years. The interest rate
  (required rate of return) was 12 (didnt
  change).

2
Discounted Cash Flow (prob.2)

• The project had an initial investment of 300,000.
  It returned 35,000 per year. The project lasted
  72 months. The first three years, the interest
  rate was 11 and the inflation was 3. The next
  three years, the interest rate rose to 14 and
  the inflation rate to 7. What is the NPV ?

3
Your Project

• Describe the selection model that you are using
  in your project (use matrix).
• What should you do if after adding all the points
  by properly using the selection model, the option
  that you think is the best is not the winner ?

4
Functional/Project/Matrix Org.

• Under what type of organization are conflicts
  most common ?
• Describe the advantages of this type of
  organization.

5
Environmental Project

• What selection models are not suited for
  environmental projects ? Explain ?

6
Primary Goal of a PM

• Performance
• Cost
• Time

7
Until Recently, projects in most firms were under
the

• A) Matrix Organization
• B) Project Organization
• C) Functional Organization
• D) All of the Above

8
Small firms usually cant afford to have projects
under the

• A) Matrix Organization
• B) Project Organization
• C) Functional Organization

9
Deming concluded that

• 1) Managers rarely used statistics
• 2) Managers rarely used statistics properly to
  find out what was going on right and wrong
• 3) Managers were good at finding out who is being
  successful or not, but rarely good
• at finding out why.

10
Deming

• Was a fierce competitor that stimulated
  competition in the Japanese Industry
• Deming was the MVP of Superbowl III
• Deming had a great impact on the software
  industry
• All of the above
• None of the above