Approving a project that results in a financial loss
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Are there conditions under which an IT/corporate executive committee should approve a proposed solution that the economic analysis demonstrates will result in a financial loss?
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Solution Summary
Are there conditions under which an IT/corporate executive committee should approve a proposed solution that the economic analysis demonstrates will result in a financial loss?
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There are a few situations where an economic loss wouldn't immediately be a reason to dismiss a solution. It certainly does bear weight to the overall decision, but other factors need to be taken into consideration. This can be compared to a construction project with a negative net present value. As a general rule of thumb, if the net present value analysis shows a negative net present value, the project should be rejected or abandoned because the company ...
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