Capital Planning and Budgeting
Each project is now rated, based on how close it is to meeting each criterion. In our example, we use a scale of 1 - 10, and come up with the following:
It is important not to over-analyze and get bogged down in developing precise numbers. The point is to help accurately prioritize various capital projects based on their relative importance. Also, keep in mind that certain criteria may be considered better if their numbers are lower. In the example above, cost has a negative correlation - that is, the lower the cost, the higher it is scored.