Details: Project selection directly affects organizational success.
As BPP prepares to offer its new portfolio management services, it sees a need to address the project selection process. Provide a memorandum detailing the flow of information involved in a generic capital budgeting process. This will be used as a basis for developing a standard BPP approach.
The memorandum should discuss the organizational cost of capital, how to integrate new project investment with an existing investment portfolio, and how to account for organizational tolerance for risk. Show how balance sheets, income statements, and cash flow statements are used as inputs to diagnose organizational, project health, and shareholder value. Include generic approaches to evaluation, and briefly discuss specific approach options in the framework.© BrainMass Inc. brainmass.com June 3, 2020, 9:29 pm ad1c9bdddf
The response addresses the queries posted in 1382 words with references.
//The given discussion paper includes the discussion in relation to the projects taken by Organizations and their selections for the appropriate Organizational Success. In this series, in the first section of the discussion paper, the explanation of the 'Project Selection' and 'Organizational Success' is given in detail//
Project Selection and Organizational Success
Project is a single-shot set of activities having a definite beginning and ending points. The activities of a project are performed in a particular order as they have precedence relationships. The key concept of a project is that it is a one time happening, a happening that will not be replicated daily, weekly or monthly in changing organization resources into goods or services. Project is an organized program of activities carried out to reach a defined goal, often of a non-recurring nature with a specified terminal point (Agarwal & Mishra, 2007).
BPP is preparing to offer a new portfolio management services. The success of the organization depends on the success of the project. Applications of a collection of tools and techniques to direct the use of diverse resources towards are the accomplishment of a unique, complex, one time task within time, cost and quality constraints. The capital budgeting refers to the allocation of funds to different long term assets. Capital budgeting decision denotes situation where lump sum funds are invested in initial stages of projects.
This involves entire process of decision making relating to acquisition of long term assets whose returns are expected to arise over a period beyond one year. Capital budgeting decisions are often said to be the most important part of corporate financial management. It affects the probability of a firm for a long period, and therefore, importance of these decisions is obvious (Agarwal & Mishra, 2007).
//In the next section of the discussion paper, the 'Effects of the Capital Budgeting of the Project' for the success of the business organization are given in detail to make the understanding of the degree of success of the organizational functioning.//
The effects of capital budgeting of project on the success of the organization are as follows:
? Long terms effects: Capital ...
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