Risk-Based ROI, Capital Budgeting, and Portfolio Optimization in the Department of Defense https://www.dau.edu
° Finally, a series of portfolios using the nonmonetary, noneconomic military OPNAV, COMMAND, and KVA estimates was applied in the portfolio model but using budgetary constraints. The relevant custom military values and their weighted average values for the portfolio were maximized.
Figure 3 shows the results of a capital budgeting analysis. The 10 programs under consideration were evaluated based on their fnancial and economic viability. The standard economicmetrics such asNPV, IRR,MIRR, ROI, and others are shown. The bar chart provides a visual representation of one of themetrics, whereas the bubble chart shows multiple result metrics at once (e.g., the NPV on the x-axis and the IRR on the y-axis, and size represents NPV with Terminal Value). In this chart, the large-ball programs on the top far right of the chart would be better ranked than smaller ball projects on the bottom left.
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Defense ARJ, January 2020, Vol. 27No. 1 : 60-107
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