Question

Module 6 Disucssion Capital budgeting is a complicated process that is essential to good investment decisions by a company. Briefly review either your personal experiences and/or the financial literature to identify and present a description of one actual capital project/product failure and the reasons attributed to the failure. For those of you who do not have personal experiences the following are some illustrated examples of failed projects/products over the last 50 years you may want to look up and consider: New Coke, Iridium Satellite Communication, the Edsel automobile, Beta (vs. VHS), the Concord SST, and various Dot Coms. Feel free to research others. Remember this is a short exercise - do not go overboard - a little bit of research and summation is all that's required. Share your short, concise description of the project and the major reasons you believe it failed. You must post first before you will be able to view those of your classmates. Once you have posted your thread you need to post two replies. All this is due by Sunday.

Answer 1

Let's take London's 2012 Olympic Project. Its budget was over £ 9bn which is triple its original estimation.

The cause of project failure can be:

• The scope of the project was not properly defined.
• Lack of management.
• Lack of planning.
• Changing requirements and specifications.