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Financial Viability Assessment
⏤see how your proposed project aligns with executive leadership business strategy
Momentum Financial Viability Assessment measures the financial value of a proposed project to reveal how the project aligns with executive leadership financial strategy—globally 24x7. The AI algorithm, financial viability index (FVI), is utilized to automate and quickly compare proposed project financial metrics to current portfolio...enabling informed project selections that make best use of limited resources.
Financial Viability Assessment | Guidelines
Executive leadership establishes guidelines for financial viability assessment that include real world financial factors and 3 key financial metrics and that consider the time value of money and its impact on future net cash flow. FVA Guidelines can be adjusted by executive leadership as business conditions change (e.g., cost of capital, budget changes, portfolio value, etc.) to increase portfolio value by improving decisions regarding project selection and execution.
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Real World Financial Factors
Real world financial factors account for the time value of money and external financial factors. Defining values for each real world financial factor allows more accurate financial forecasting based upon "real world financial factors" that will absolutely influence projected financial estimates. Executive leadership defines the value to be used for each real world financial factor.
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Tax Rate
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Discount Rate
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Inflation Rate
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Reinvestment Rate
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3 Key Financial Metrics
The 3 key financial metrics are calculated based upon the input values selected for real world financial factors. The 3 key financial metrics are applied across all projects in the portfolio to allow accurate comparison of project financial metrics relative to other projects in the portfolio.
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Factored Internal Rate of Return (Factored IRR)
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Factored Net Present Value (Factored NPV)
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Factored Payback Period (Factored PBK)
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Financial Ratings (Poor/Moderate/Good)
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For each financial metric, executive leadership establishes strategic threshold values for "Poor" and "Good" to achieve desired financial objectives—globally 24x7.
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Financial Viability Index (FVI)
The financial viability index (FVI) is an AI algorithm that incorporates all 3 key financial metrics (FRR, FPV, FPP) to support strategic project selection aligned with executive leadership financial strategy (FVA Guidelines). Why is the FVI important? A project with a “Good” present value may have a “Poor” rate of return—for example, when a contract lasts a long time but doesn’t pay very much. If present value is the only consideration in project selection, you may unknowingly select projects with “Poor” rates of return—this can be avoided by using FVI to guide strategic project selection to optimize value and make best use of limited resources.
As shown in the FVI equation, the FVI project value is relative to "Good"—therefore a project with an FVI value of 1.0 or greater has a financial rating of "Good" as defined by executive leadership.
Financial Viability Assessment | Very Simple Process
Quickly assess the financial value of your proposed project and see how it aligns with executive leadership financial strategy—is the proposed project Good, Moderate or Poor ?
1. Initial Investment—how much am I going to spend?
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Enter the estimated costs to implement the project.
2. Projected Net Cash Flow—how much am I going to make and when?
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Enter an estimate for future projected net cash flow.
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NOTE: For each project, use the same number of future years to allow accurate comparison of project financial metrics relative to other projects in the portfolio.
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3. Financial Viability Assessment | Results (Poor/Moderate/Good)
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See the estimated financial value the proposed project and compare it against the current improvement portfolio.
4. Strategic Project Selection | Compare Project vs. Portfolio—is this project worth doing relative to other projects in the portfolio?
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Compare Project Value
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Compare the the value of the proposed project relative to the current improvement portfolio. The financial value and risk rating of a proposed project is ranked relative to the current improvement portfolio. When selecting a project, risk rating should be considered in conjunction with financial value.
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How does the value of this proposed project compare to other projects in the portfolio?
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Align Portfolio with Available Budget & Resources
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Can each project in the portfolio be completed with available budget? (e.g., CAPEX, OPEX)
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Can each project in the portfolio be completed with available resources? (e.g., employees, contractors, equipment, etc.)
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Take Action with Value-based Decision Making
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Practice value-based decision making by basing project selection on both strategic financial value and risk rating—this approach delivers optimal improvement portfolio value and best use of limited resources.
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Guide strategic project selection aligned with executive leadership business strategy—globally 24x7.
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Take a Test Drive
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Microsoft Partner Showcase | OneTower | Momentum iPMO | Financial Viability Assessment
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NOTE: Microsoft Power Apps license is required to take the below FVA Test Drive.
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