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Practical Corporate Investment Decision-Making Guide

This topic is designed to assist the project management professional on how to relate insights gained from economic analysis to investment making requirements and information to company executives. Most companies have economists and cost engineers that provide thorough economic analysis on potential investment opportunities. Often, however, project professionals have difficulty with succinctly communicating to executives who may not have enough time to invest in the volume of analytical material that project economists typically produce to defend the project payout. Company executives are immersed in company strategy and are searching for projects to meet the company strategy. Economics and investment strategy are two related but different subjects.

Therefore, project personnel need to describe their projects to meet the key features that the company executive requires to render a decision to meet corporate strategy. This paper identifies the key concepts and details necessary to translate project economics into a few basic parameters to assist executives in investment decision making. The paper is written to provide the structure required for a project assessment document (PAD) with explanation and examples of the technical requirements for each section.