A large utility company is modernizing its infrastructure, anticipating tangible advantages and intangible improvements such as compliance. The sponsor requests a way to evaluate future monetary returns in today’s terms, factoring in financial considerations like interest or inflation. Which approach may best help the sponsor align projected gains with immediate value for decision-making?
An approach that organizes metrics using a broad operational perspective
A technique that rates threats based on probability and severity
A model that scores intangible benefits according to organizational criteria
A mechanism that consolidates expected returns into a single figure at the date of analysis
One approach, often referred to as net present value (NPV), shifts future forecasts into an equivalent figure at the date of analysis by applying a financial rate. This helps stakeholders compare multiple investments because it provides a monetary expression of program value now. Weighted scoring and Balanced Scorecard address additional dimensions, yet they do not convert estimated proceeds into an up-to-date currency figure. Risk ranking concentrates on the likelihood of unfavorable events rather than translating future gains.
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What is Net Present Value (NPV) and how does it work?
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Why doesn’t a Balanced Scorecard or weighted scoring fulfill this purpose?
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How is NPV different from risk ranking in program evaluation?
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PgMP
Benefits Management
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