Describe or define any four important attributes for screening models used to evaluate projects
What will be an ideal response?
Souder identifies five important issues that managers should consider when evaluating screening models: realism, capability, flexibility, ease of use, and cost, and the text offers up comparability. Taking these in reverse order, comparability refers to the ability of the criterion to be applied to multiple projects without bias. Cost can be defined as the expense in either time or money (or both) that is required to use the model. Ease of use calls for the model to be simple enough to be used by people in all areas of the organization, both in specific project roles and in those related to functional positions. Flexibility is the quality of ease of modification if trial applications require changes. Capability is the ability of the model to respond to changes in the conditions under which projects are carried out. Finally, realism is the ability of the model to reflect organizational objectives, including a firm's strategic goals and mission.
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Macaulay Roller Skates has three product lines—D, E, and F
The following information is available: D E F Sales revenue $70,000 $60,000 $31,000 Variable costs (30,000 ) (10,000 ) (12,000 ) Contribution margin $40,000 $50,000 $19,000 Fixed costs (15,000 ) (10,000 ) (24,000 ) Operating income (loss) $25,000 $40,000 $(5,000 ) The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Macaulay drops product line F and does not replace it, what effect will this have on operating income? A) Operating income will increase $5,000. B) Operating income will increase $19,000. C) Operating income will increase $24,000. D) Operating income will decrease $19,000.
When the term "beneficiary statement" is used by those in real estate finance, it identifies a statement made:
A: By the lender, as to the current balance due to pay off a real estate loan; B: Designating the one who will receive the property in the event of the borrower's death; C: By the insurer, stating the amount that will be paid to the policyholder if the improvements are destroyed; D: By the property owner, listing the beneficial features of an assumable loan.