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¶ … Juniper, Palomino, and Stargazer project. This email will analyze some of the data associated with these projects. Each of the projects has a different level of risk associated with them that include a low risk project, a medium risk project, and a higher risk project. All three of these projects are feasible in regards to the financial returns that are projected to be gained from the individual projects.
Projected Cash Flows
Juniper
Low Risk
Project Cost
Profit
Palomino
Medium Risk
Project Cost
Profit
Stargazer
High Risk
Estimated Cost
Profit
All three projects offer the organization a profit and each of these projects are feasible from a financial standpoint. Therefore the decision about which project to implement is dependent upon the merits of each project individual relative to the other two. Part of this decision will be objective and consider the potential profits;...
If the decision was made on a financial basis alone, then the Stargazer project would provide the greatest profitability estimate. However, the level of risks associated with the projects must also be considered in terms of the risk profile and strategic ambitions for the company.
The breakeven point for all three projects based on the projections of cash flows has been calculated to be greater than one year and less than two years. It is not surprising that the largest return is to be found on the project with the highest risk associated with it. Although the risk of completing this project on time is high there are other factors that make this project appealing. For example, the product life is forecasted to be 7 years for this product which could offer the company a sustained return on their investment. Additionally, the project has already been mostly funded and only a portion of the project remains to be further funded. Although the project still requires more funding than…
Works Cited
Benta, D. (2011). On Best Practices for Rick Management in Complex Projects. Informatica Economica, 142-152.
Intaver Institute. (2011). Project Risk Management. Retrieved from Intaver Institute: http://www.intaver.com/riskyprojectprof.html
Project Management Email Response Choosing a Project In order to determine which of the three projects is best, it is important to conduct a feasibility study. That is done to take a careful look at each one of the projects offered and examine what they provide to the company in the future. Of course, it is not possible to know exactly what will happen, and there are only projections and assumptions that
Project Management Juniper Low Risk Project Cost Profit Palomino Medium Risk Project Cost Profit Stargazer High Risk Estimated Cost Profit All three projects are feasible from a financial standpoint because they all offer a decent return. The breakeven point for all three projects is greater than one year and less than two years. The largest return is to be found on the project with the highest risk associated with it; which is not surprising. Although the risk of completing this project on time
Project Management Determine which project might be implemented and why (e.g. feasibility study or breakeven analysis etc.) The project which has the potential to provide the greatest return is Stargazer. Using a feasibility study, this will offer the firm with a number of benefits that will help it to increase its bottom line results. This is occurring with the ROI rising by 56% in three years. Over seven years, is when the
The simplest of these is the return on investment. The three calculations are presented; it is assumed that Juniper does give 3 years of returns and that the return for years 3-7 of Stargazer remains the same as year 3. Table 2; Return on investment Juniper Palomino Stargazer ROI per annum 250,000 427,500 Variable Lifetime (years) 3 5 7 Total return 750,000 2,137,500 4,600,000 Investment 325,000 655,000 575,000 ROI The ROI indicates that Stargazer will give the highest rate of return, and with a project that will last for 7 years,