Project Management

SUMMARY: Once the commercial and technical aspects of a project idea have been evaluated and approved, the project manager must examine the financial feasibility of the project. The project manager uses two criteria to evaluate rate of returns on project investments: non-discounting criteria and discounting criteria. The time value of money is ignored when non-discounting criteria are used, but it is taken into consideration when discounting criteria are employed. The important methods used under the non-discounting criteria are average rate of return, payback period, and urgency method. Net present value, internal rate of return, and benefit-cost ratio are important methods used under the discounting criteria.

Projects can be simple, non-simple, pure, or mixed.