Statement 1: Design of a project portfolio system should include classification of project, selection criteria depending upon classification, sources of proposals, evaluating proposals and managing the portfolio of projects. Many organizations find they have three different kinds of projects in their portfolio: compliance (must do), operational and strategic projects. Meanwhile, selection criteria are typically identified as financial model and nonfinancial model. Statement 2 Three different project management structures use by firms to implement project: functional organization, dedicated project teams and matrix structure. A simple explanation of organizational culture and structure is that it reflects the "personality of an organization. a) Based on Statement 1, interpret impact of projects portfolio on project selection. (6 Marks) b) You are head of project team at LEXUS. Your team is considering two different installation projects, AGV Project and Crane Project (refer Table 1 and Table 2). Based on past history, LEXUS expects at least a rate of return of 20 percent. Your financial advisors predict inflation to remain at 2 percent into the foreseeable future. Given the following information for each project, which one should be LEXUS's first priority? Should LEXUS funds any of the other projects? If so, what should be the order of priority based on return of investment? By using suitable financial models of selection criteria, determine LEXUS's priority. Table 1: Data for AGV Project Year Investment 0 RM 600,000 1 2 3 4 5 Revenue Stream RM O RM 600,000 RM 75,000 RM 20.000 RM 15,000 RM 10,000 Table 2: Data for Crane Project Year Investment 0 RM 400,000 2 3 4 5 Revenue Stream RM O RM 400,000 RM 100,000 RM 25,000 RM 20,000 RM 10.000 (8 Marks) c) You work for Leica Microsystems (Leica), which recognized for optical precision and innovative technology. Leica has been the market leader in microscopy for the past 10 years and has decided to diversify by applying its technology to develop a top-quality binocular. Based on Statement 2, identify what kind of project management structure would you recommend they use for this project. What information would you like to have to make this recommendation, and why? Evaluate your answer. (8 Marks)