Business and Management Project Assessment Essay

Total Length: 580 words ( 2 double-spaced pages)

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The simplest of these is the return on investment. The three calculations are presented; it is assumed that Juniper does give 3 years of returns and that the return for years 3-7 of Stargazer remains the same as year 3.

Table 2; Return on investment

Juniper

Palomino

Stargazer

ROI per annum

250,000

427,500

Variable

Lifetime (years)

3

5

7

Total return

750,000

2,137,500

4,600,000

Investment

325,000

655,000

575,000

ROI

The ROI indicates that Stargazer will give the highest rate of return, and with a project that will last for 7 years, it is also the longest term return. If all projects had an equal risk profile, then the Stargazer may be the most attractive due to the return, even when broken down to an annual return the Stargazer still gives the highest return.

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However, the risk profile for the projects is different; for Juniper there is a high level of certainty, it is believed customers will want the product and that there is a high level of certainty it will be completed on time. Palomino has a higher risk associated with on time completion, moreover the project is for a single customer; the risk associated with this will depend in the relationship with the customer and the related contract, this could be a low risk if the sales are assured, but if the customer has the ability to pull out of the contract and benefits fro low switching costs, this may increase the risk (Mintzberg et al., 2008). The last project; Stargazer, has the greatest risk associated with on time.....

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