The Financial Decision Engine, explained
Where every other engine's output converges into a single PROCEED, REVIEW, or DECLINE.
The Financial Decision Engine is where every other WaVES engine's output converges into one verdict: PROCEED, REVIEW, or DECLINE. It's organised into five tabs: Investment Feasibility, Construction Performance, Value Realization, Money, and Decision, and applies three hard gates that must all pass regardless of overall score: NPV above zero, IRR at or above the hurdle rate, and DSCR at or above 1.25.
Every other engine produces a number or a score. This engine is where those numbers are weighed against each other and produce a single, defensible decision.
The five tabs
- Phase 1, Investment Feasibility (IFS): combines market and demand strength, a base score, NPV/IRR/DSCR performance, an approvals and legal confidence figure, and a strategic-fit figure.
- Phase 2, Construction Performance (CPS): Cost Performance Index, Schedule Performance Index, cash efficiency, and the inverse of the current risk score.
- Phase 3, Value Realization (VRS): revenue achieved vs. forecast, quality index net of defect penalties, financial closure, actual vs. target ROI, and sustained lifecycle value.
- Money: total cost, total revenue, hurdle rate, DSCR, IRR, and NPV, entered directly or pulled from the Property Viability Engine via the Link Manager.
- Decision: the overall score, the proceed threshold, the three hard gates, and the final verdict.
How the score is weighted
The overall score blends the three phases: 40% Phase 1, 35% Phase 2, and 25% Phase 3. The proceed threshold depends on the project's zone from the Project Profile Score Calculator: 78 for Black or Green, 80 for Blue, 85 for Yellow, 90 for Red or unclassified.
The three hard gates
- NPV must be above zero.
- IRR must be at or above the hurdle rate.
- DSCR must be at or above 1.25.
Verdicts
- PROCEED: overall score meets the threshold and all three gates pass.
- DECLINE: overall score below 60, or NPV at or below zero, or IRR below hurdle, or DSCR below 1.25.
- REVIEW: everything in between, close enough to proceed, but not a clean pass.
Cross-checking against other engines
If the Project Viability Score Calculator or Project Profile Score Calculator have been completed, the Decision tab compares its verdict against theirs and flags any mismatch explicitly, so a favourable Financial verdict that contradicts a weak Project Viability Score score or a Red zone classification doesn't go unnoticed.
See this against your own project's numbers
The Property Viability Engine runs this logic against your actual location, standard, and size, free without limitation.
Check Compliance For FreeQuestions people also ask
Can a project PROCEED if it fails one of the three hard gates?
No. All three hard gates: NPV above zero, IRR at or above hurdle rate, and DSCR at or above 1.25, must pass regardless of the overall score. A failing gate always results in DECLINE.
Why does the proceed threshold change by zone?
A Red zone project carries more structural risk than a Black or Green zone project, so it needs a higher score to clear the same bar. The threshold adjusts to prevent a high financial score from masking a weak underlying project profile.
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