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    Exercises 2-Chapter4 - Solution

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    ahmadbinowaidha
    The document provides solutions to three exercises involving a SWOT analysis, financial analysis of a project, and weighted scoring model to determine grades. The SWOT analysis example is for a college. The financial analysis finds the project has negative NPV and ROI so is not recommended. The weighted scoring model shows example scores and grades for three students.

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    Exercises 2-Chapter4 - Solution

    Uploaded by

    ahmadbinowaidha
    8 views3 pages
    The document provides solutions to three exercises involving a SWOT analysis, financial analysis of a project, and weighted scoring model to determine grades. The SWOT analysis example is for a college. The financial analysis finds the project has negative NPV and ROI so is not recommended. The weighted scoring model shows example scores and grades for three students.

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    Exercises 2-Chapter4 -Solution

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    The document provides solutions to three exercises involving a SWOT analysis, financial analysis of a project, and weighted scoring model to determine grades. The SWOT analysis example is for a college. The financial analysis finds the project has negative NPV and ROI so is not recommended. The weighted scoring model shows example scores and grades for three students.

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    8 views3 pages

    Exercises 2-Chapter4 - Solution

    Uploaded by

    ahmadbinowaidha
    The document provides solutions to three exercises involving a SWOT analysis, financial analysis of a project, and weighted scoring model to determine grades. The SWOT analysis example is for a college. The financial analysis finds the project has negative NPV and ROI so is not recommended. The weighted scoring model shows example scores and grades for three students.

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    You are on page 1of 3

    Exercises Solution - Chapter 4

    Exercise 1

    Download a free trial of MindView mind mapping software from www.matchware.com or similar software and
    create a mind map of a SWOT analysis for your organization. Include at least two strengths, weaknesses,
    opportunities, and threats, and then provide ideas for at least three potential projects. Or, you can use your
    college or university for the SWOT analysis, focusing on what it can do to improve services for students.
    Solution:

    Example of SWOT analysis for a college.

    Source: https://www.sampletemplates.com/business-templates/analysis/college-swot-analysis-samples.html
    Exercise 2

    Perform a financial analysis for a project using the format provided in Figure 4-5. Assume that the projected costs
    and benefits for this project are spread over four years as follows:
    - Estimated costs are $300,000 in Year 1 and $40,000 each year in Years 2, 3, and 4.
    - Estimated benefits are $0 in Year 1 and $120,000 each year in Years 2, 3, and 4.
    - Use a 7 percent discount rate, and round the discount factors to two decimal places.
    - Create a spreadsheet or use the business case financials template on the Companion website to
    - calculate and clearly display the NPV, ROI, and year in which payback occurs.

    In addition, write a paragraph explaining whether you would recommend investing in this project, based on your
    financial analysis.
    Solution:
    Discount rate 7%

    Year
    1 2 3 4 Total
    Costs 300,000 40,000 40,000 40,000
    Discount factor 0.93 0.87 0.82 0.76
    Discounted costs 279,000 34,800 32,800 30,400 377,000

    Benefits 0 120,000 120,000 120,000


    Discount factor 0.93 0.87 0.82 0.76
    Discounted benefits 0 104,400 98,400 91,200 294,000

    Discounted benefits - costs (279,000) 69,600 65,600 60,800 (83,000) NPV


    Cumulative benefits - costs (279,000) (209,400) (143,800) (83,000)

    ROI -22%
    Payback does not occur.
    Assumptions

    The NPV and ROI are both negative, and payback does not occur. Based on the financials, this project is not a good
    investment. (Note: You can add the round function to the discount factor formulas.)
    Exercise 3

    Create a weighted scoring model to determine grades for a course. Final grades are based on three exams worth
    15%, 15%, and 25 %, respectively; homework is worth 15 %; and a group project is worth 30 %. Enter scores for
    three students. Assume that Student 1 earns 100 % (or 100) on every item. Assume that Student 2 earns 70 % on
    each of the exams, 80 % on the homework, and 95 % on the group project. Assume that Student 3 earns 90 % on
    Exam 1, 80 % on Exam 2, 75 % on Exam 3, 80 % on the homework, and 70 % on the group project.
    You can use the weighted scoring model template, create your own spreadsheet, or make the matrix by hand.
    Solution:

    Weighted Decision Matrix for Project Name


    Created by: Date:
    Criteria Weight Student 1 Student 2 Student 3
    Exam 1 15% 100 70 90
    Exam 2 15% 100 70 80
    Exam 3 25% 100 70 75
    Homework 15% 100 80 80
    Group project 30% 100 95 70

    Weighted Project Scores 100% 100 79 77.25

    Weighted Score by Student

    Student 3

    Student 2

    Student 1

    0 20 40 60 80 100 120

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