Question

For a project selected using non-numeric models, identify the True statement regarding relative priorities for project selection.

a) Projects are ranked based on financial metrics
b) Priorities are determined by subjective judgments
c) The focus is on maximizing shareholder value
d) Relative priorities are fixed and unchangeable

Answer 1

The true statement regarding relative priorities for project selection using non-numeric models is that priorities are determined by subjective judgments.

Step-by-step explanation:

In project selection using non-numeric models, the true statement regarding relative priorities is that priorities are determined by subjective judgments (option b). In this method, projects are evaluated based on non-financial criteria such as strategic alignment, risk level, and resource availability. Unlike numeric models that use financial metrics, non-numeric models take into account qualitative factors for decision-making.

For example, if a company wants to prioritize projects that align with its long-term strategic goals, it may give higher priority to a project that supports sustainability initiatives, even if it has lower financial returns.

Relative priorities in project selection using non-numeric models are not fixed and unchangeable (option d). They can vary based on changing circumstances or new project opportunities.