Question

Project	NPV(K million)	Engineering headcount
Router	17.7	50
Project A	22.7	47
Project B	8.1	44
Project C	14.0	40
Project D	11.5	61
Project E	20.6	58
Project F	12.9	32

Your Division at Nashika Limited, a large networking company, has put together a project proposal to develop a new home networking router. The expected Net Present Value (NPV) of the project is K17.7 million, and the project will require 50 software engineers. Nashika has a total of 190 engineers available and the router project must compete with the the above projects for the engineers:

How Should Nashika prioritize these projects.

Answer 1

Higher the NPV, better is the project and lower the employee required lower is the cost (Better project). So, Nashika limited should evaluate projects based on highest NPV per employee to get the most productive projects done first.

Below table summarizes each project and their NPV per employee (in percentage terms)

Project	NPV(K million)	Engineering headcount	NPV per Engineer (%)	Total Engineer Count
Project A	22.7	47	48.30%	47.00
Project F	12.9	32	40.31%	79.00
Project E	20.6	58	35.52%	137.00
Router	17.7	50	35.40%	187.00
Project C	14	40	35.00%	227.00
Project D	11.5	61	18.85%	288.00
Project B	8.1	44	18.41%	332.00

Now Project A, Project F, Project E and Router projects have the highest NPV per Employee till count of total employee does not exceed 190. So, these are the four projects that Nashika limited should do.