Managerial Ranking and Project Selection

Abstract

Models of quantification of the risk and return on investment projects are often the subject of observation by the scientific and professional community. In addition to the problem of project selection, managers are increasingly faced with the problem of ranking projects, which usually results from the lack of funds for financing their projects. The economic crisis has led to a growth in distrust, thereby preventing easy access to monetary funds. Therefore, companies increasingly find difficult to obtain the necessary funds to finance investment projects, which obliges managers to rank projects that received a positive rating during the project selection phase. The profitability index is a modern method of evaluation of investment projects, which, besides providing the possibility of selecting projects, allows projects to be ranked as well.

Keywords

• project management
• net present value
• internal rate of return
• project selection
• project ranking
• profitability index