Читать книгу Capital Projects - Barshop Paul - Страница 7

Executives approve or reject capital projects based on the project's expected value. The financial gap between what was expected from a capital project when it was approved and what was actually achieved can be measured. The average project delivers 22 percent less NPV than what was forecasted when the project was funded. That is what we at IPA found in a study of 431 completed industrial sector capital projects. The business goal for each project was to increase profits by adding new production or manufacturing capacity.3 The 22 percent NPV erosion means a project targeting profit of $1 million would come out only $780,000 ahead on average.

The good news is that the average project is profitable; otherwise, everyone would be bankrupt! The bad news is that the promised profitability is often missed by a large and highly unpredictable margin.