Purchase Solution

Over-Optimistic Projects

Not what you're looking for?

Ask Custom Question

it is basically up to management to filter out the overoptimistic projects. Do you think that companies might be better served if they encouraged project sponsors to be more realistic? Is it even possible to rid the sponsor of their inherent favoritism to a project? Thoughts?

Purchase this Solution
Solution Summary

This solution explains the importance of filtering out overoptimistic projects and getting rid of inherent favoritism in companies.

Solution Preview

http://web.stanford.edu/group/FRI/indonesia/documents/gittinger/Output/chap1.html

it is basically up to management to filter out the overoptimistic projects. Do you think that companies might be better served ...

Purchase this Solution
Free BrainMass Quizzes
Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

View More Free Quizzes
Related BrainMass Solutions

  • Value of a Firm

    Upper saddle River NJ: Prentice-Hall In a situation in which investors are rational and managers are over optimistic, if management were to raise more money for new projects, the value of the firm would probably change for the better if the projects were

  • Capital Budgeting and Net Present Value

    Determine the range of annual cash inflows for each of the two projects. 2. Assume that the firm's cost of capital is 10% and that both projects have 20 year lives.

  • Capital budgeting proposals

    a) $30,000 ** b) $10,000** c) $5,000 d) $0 The range is the value over which the cash flows vary.

  • Excessive Optimism and Overconfidence

    fa=viewArticle&id=1486&language=english) Therefore, excessive optimism and over-confidence might help managers initiate and complete daunting projects that they would otherwise reject or abandon.

  • Risk preference/risk analysis and NPV calculations

    Calculate the expected return over the 4-year period for each of the three alternatives. b. Calculate the standard deviation of returns over the 4-year period for each of the three alternatives. c.

  • Finance questions

    over the period 2007-2010.

  • Scenario Analysis for Mutually Exclusive Projects

    Project A Project B Initial investment (CF0) $8,000 $8,000 Outcome Annual cash inflows (CF) Pessimistic $ 200 $ 900 Most likely 1,000 1,000 Optimistic 1,800 1,100 a. Determine the range of annual cash inflows for each of the two projects.

  • Murdock Paints -Mutually Exclusive Projects

    Mutually exclusive projects: the range of annual cash inflows and NPV for for each of the two projects are calculated.

  • Estimating Project Time and Cost

    Then, the buckets added together to present the over all estimate. Many companies use Project Evaluation and Review Technique (PERT) as a way to get an estimate based upon optimistic, likely and pessimistic estimates for each line item.

View More Related Solutions