5 Unknown Financial Measures For Project Success

financial measures

5 Unknown Financial Measures For Project Success

 

LAST UPDATED ON: 27TH AUGUST, 2019

 

There are some financial measures that one can use to decide whether a project is succeeding or not. The reason for such financial analysis will help you to determine whether you have achieved your project goals or not. In this article, I want to look at five financial measures that can be used to determine project success. 

 

5 Unknown Financial Measures For Project Success

#1 NET PRESENT VALUE

Net Present Value can be seen as the value in the presence of a sum of money. In contrast, to some future value, it will have been when it has been invested at compounded interest. The NPV allow me to know what the amount I have invested in a project will worth by the time I am recouping my investment in the future. 

 

#2 RETURN ON INVESTMENT

Return on Investment is a ratio between net profit and the cost of investment. A High ROI means the investment gains compare favourably to its cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiencies of several investments. We normally use ROI to decide which proposal to choose for execution based on high return on Investment. 

Seobility SEO Tool

 

YOU CAN ALSO READ  Audio: Managing Cost Management Plan for Projects

#3 INTERNAL RATE OF RETURN

The Internal Rate of Return can be seen as a snapshot of an investment ‘s rate of return. The term Internal refers to the fact that the calculation excludes external factors such as risk-free trade, inflation, the cost of capital or various financial risks. It is simply used to determine the rate at which what you have invested in a project will be coming back to you.

 

#4 THE PAYBACK PERIOD

The Payback Period is the length of time it requires for an investment to recover its initial outlay in terms of profit or savings. Here, we are not so much concerned about profit, we just want to know when we will recover our investment. Take, for example, if Insulation costs $5,000 and save $100 a year, its payback period will be two years.

 

#5 BENEFIT COST RATIO

A Benefit-Cost Ratio (BCR)  is an indicator used in Cost-Benefit Analysis, that attempts to summarize the overall value for money of a project or proposal. A BCR is a ratio of the benefits of a project or proposal, expressed in monetary terms, relative to its cost, also expressed in monetary terms. 

 

 

 

Now your take on this argument.

We would also like to hear what you feel about the topic we discussed today. Your feedback is very important to us. Feel free to drop your comments and recommendations. If you have a contrary opinion, you can drop that too.

 

You can also join our Facebook Page CRMNigeria for more updates. You can do that by clicking on the link or searching for our page on Facebook.

 

YOU CAN ALSO READ  How to Manage Requirement Traceability Matrix

Click here to Download 5 E-Books that I have taken time to prepared for you.

These E-Books contains formulas that have helped many of my students to nail the PMP Exam. You can also make use of this E-Books. While you are using it if you have questions to ask me concerning the Formulas, feel free to shoot me a mail. I am committed to assisting you to nail your PMP exam. It’s a pledge. You can always count on me as a friend. 

 

PS: For like seven years since I started blogging I have tried many platforms and tools. Some worked and some of them performed below expectation. Here are some of the tools that I will gladly recommend for you any day, any time.

 

YOU CAN ALSO READ  4 Essential Elements Of stakeholder Analysis Matrix

BEST AUTO SEO FOR JUST $1

BEST KEYWORD FINDER BY MANGOOL

BEST HOSTING AND DOMAIN SERVICE

BEST HOSTING IN NIGERIA (AFFORDABLE)

BEST FOOD SUPPLEMENTS

 

YOU CAN ALSO READ  6 Project Tools For Project Alignment

You can also download our Mobile App here.

Domain names for just 88 cents!How Namecheap Hosting saved my Blogging Career 1
Action Point.
You need to confirm your subscription by clicking on the link sent to you. You can check the spam folder for it. Add us to your mailing list to receive directly from us.

Adeniyi Salau is a Digital Marketer, Project Manager and SEO Expert of repute with about a decade of Blogging and online marketing experience. He is always ready to share his experience with others.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

CommentLuv badge