Common techniques for selecting projects include focusing on broad organizational needs, categorizing
projects, performing financial analyses, developing weighted scoring models, and using balanced
scorecards. Perform a financial analysis for Project A. Assume the projected costs and benefits for this
period are spread over four years as follows: Estimated costs are GH¢ 200,000 in year 1 and GH¢ 30,000
each year in years 2, 3 and 4. Estimated benefits are GH¢ 90,000 in year 1 and GH¢ 350,000 each year
in years 2, 3 and 4. Use a 10% discount rate and round the discount factors to two decimal places.
Calculate the Net Present Value (NPV), Return on Investment (ROI) and year in which payback occurs.
In addition, write a paragraph explaining whether you could recommend investing in this project, based
on your financial analysis.
[10 marks]
2. Consider the given Network Diagram Data for a Large Project Y. All duration estimates or estimated
times are in weeks and the network proceeds from Node 1 to Node 8.