A project manager is part of a selection committee reviewing two mutually exclusive projects. Project Alpha has significant strategic alignment with the company's long-term goals but a Benefit-Cost Ratio (BCR) of 0.9. Project Beta has moderate strategic alignment but boasts a BCR of 1.3. The organization has a strict governance policy that only projects demonstrating clear financial viability from the outset should be pursued. What should be the project manager's initial recommendation to the committee?
Recommend recalculating the BCR for Project Alpha with adjusted cost estimates to see if it can exceed 1.0.
Recommend Project Alpha because its strong strategic alignment is more valuable than its financial metrics.
Recommend rejecting both projects until an option with both high strategic alignment and a high BCR is available.
Recommend Project Beta due to its positive BCR, which aligns with the company's financial viability policy.
The correct answer is to recommend Project Beta. The Benefit-Cost Ratio (BCR) is a key financial metric where a value greater than 1.0 indicates that the project's benefits outweigh its costs. Project Beta has a BCR of 1.3, signifying it is financially viable. Project Alpha, with a BCR of 0.9, has costs that exceed its benefits, failing to meet the financial viability criterion. Although Project Alpha has stronger strategic alignment, the company's strict policy to pursue only financially viable projects makes Project Beta the correct initial choice. While strategic alignment is important, the explicit organizational constraint regarding financial viability must be prioritized in this scenario.
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