Project selection methods for SingularLogic

Running head: PRINCIPLES OF PROJECT MANAGEMENT
Principles of Project Management
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PRINCIPLES OF PROJECT MANAGEMENT1
Project selection methods for SingularLogic
From the two project selection method, the project selection method that can be used by
SingularLogic is Benefit Measurement method (BMM). This method includes project selection is
based in the technique that includes present value of the total estimated cash for the project. The
cash include project outflow as well as cash inflow. The method of benefit measurement in
project selection mainly includes the methods that are directly used by the project managers
(Turner, 2016). This particular method of project selection is not complex compared to
Constrained Optimization method and do not require advanced degree in finance which are not
easily understandable. This method is used for small as well as large project and includes rate
potential projects that are as per the specific model. This method helps in comparing the results
between other project candidates (Kerzner, 2019). The methods that are included in BMM
method of project selection is Cost benefit ratio (CBA), economic model, project payback
period, DCF (cash discounted flow), NPV (Net Present value), Scoring models, IRR (Internal
Rate of Return), and the Opportunity Cost.
Processes to conduct project selection methods
Cost benefit Ratio: This method states the ratio between present value of the cash inflow
and cash outflow value in the project. Cash inflow states the cost invested that are included in the
project and the cash outflow states the value of the return in the project (Marchewka, 2016).
Project that have high cost benefit ratio or have low cost benefit ratio are actually chosen over
other methods. This is proper way to communicate the potential value of project in easy
understandable way and it measures investing cost of project that comes against return when it is
completed.

PRINCIPLES OF PROJECT MANAGEMENT2
Economic Model: This particular model is commonly known as Economic Value Added
model and that same as CBA. This model describes difference between cost that is invested in
the project and total revenue that is generated with the profit number of the project (Heldman,
2018). This model provides the project manager with clear representation of quantifiable benefits
for the project when it gets completed and after calculation, this model gives clear idea about the
expectation of the project. EVA model provides a performance metric that includes worth
creation to define the capital return of the project that is undertaken.
Payback period: This method also shows a ration between cash and the average cash in
that period. Payback period helps in recovering the cost that is invested in project (Fleming &
Koppelman, 2016). This method is considered as a basic method of project selection and
provides output of the payback period that the project has invested. This includes a time frame
that states return on the investment for repaying total cost that was included in project. Project
having shortest payback period is considered as an ideal project.
Discounted Cash Flow: This is an analysis of benefit measurement method that is capable
of handling the issue of calculation of present value for the earned dollar in future (Boyle, 2017).
This method is one of the best methods that can be used to calculate as value of returns for
covering long period of time instead of completing it immediately. The model of payback period
model helps in calculating as well as understanding the cash in a better way and DCF helps to
incorporate the time for value for money (Heagney, 2016). This particular concept help to
translate the future earnings in present day value and intends to have more earning that that is
promised for future.
Net Present value: This method describes the current cash value of the project that is
inflow and the present cash outflow in the project (Fuller et al., 2017). NPV analysis are always