What is essential for assessing a project's potential profit?

Ranking projects using a selection matrix is essential for assessing a project's potential profit because it allows project managers and stakeholders to systematically evaluate and compare multiple projects based on various criteria, including financial metrics. The selection matrix helps in identifying projects with the highest potential return on investment (ROI), aligning with organizational goals, and understanding the trade-offs among competing projects. By prioritizing projects that are likely to yield the greatest benefits, organizations can make informed decisions about where to allocate resources and focus their efforts.

In contrast, estimating resource demand, evaluating project scope, and determining personnel needs, while all important aspects of project management, do not directly assess the potential profit of a project. These tasks are more related to project planning and execution rather than evaluating the financial viability and profitability of the project options under consideration.