An organization is rolling out multiple strategic initiatives to enhance its core product line. The sponsor wants to examine near-term outlays along with anticipated gains that may materialize several years later. Which approach should the program manager choose to determine if each initiative’s potential returns can justify those early expenditures?
Adopt a consistent break-even level for each new initiative while considering varying timelines
Use a recognized practice to translate estimated future inflows into an aggregated immediate figure for evaluation
None of these
Consider recorded costs from previous endeavors and replicate them for upcoming projects
Translating future benefits into an aggregated immediate measure helps identify whether the new initiatives will recover the upfront costs and still generate a positive outcome. Basing decisions on historical data or adopting the same breakeven requirement for every project does not factor in how staggered timelines may impact feasibility.
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What are recognized practices for translating future inflows into present value?
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PgMP
Strategic Program Alignment
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