PM Chapter 4

A Gantt chart is the same as a project management plan.

FALSE

_____ involves coordinating all of the other project management knowledge areas throughout a project's life cycle.

Project integration management

A(n) _____ is a formal group of people responsible for approving or rejecting changes to a project.

change control board (CCB)

Change requests are always made in writing.

TRUE

Opportunities and directives are essentially the same thing

FALSE

_____ refer to chances to improve the organization.

Opportunities

_____ project work includes collecting, measuring, and disseminating performance information.

Monitoring

An IT company revises its process parameters in response to complaints from vendors that products were not ready on time. This would be an example of _____. a. cost forecasting c. defect repairs b. a preventive action d. a corrective action

D Corrective actions should result in improvements in project performance.

The _____ is the minimum acceptable rate of return on an investment. a. capitalization rate c. discount rate b. internal rate of return d. required rate of return

D The required rate of return is the minimum acceptable rate of return on an investment

The _____ section of the project management plan describes specific methodologies a project might use and explains how to document information. a. management objectives c. risk management b. project controls d. technical processes

D The technical processes section describes specific methodologies a project might use and explains how to document information.

The _____ is the discount rate that results in an NPV of zero for a project.

internal rate of return (IRR)

_____ refer to undesirable situations that prevent an organization from achieving its goals.

Problems

A positive NPV means the return from a project exceeds the _____, the return available by investing the capital elsewhere.

cost of capital

Benefits minus costs is known as the _____. a. cost of capital c. discount factor b. cash flow d. opportunity cost of capital

B Cash flow is the benefits minus costs or income minus expenses.

Some organizations initiate projects using a contract in place of a project charter

TRUE

Project integration management must occur just within the context of a particular project

FALSE

Projects that address broad organizational needs are likely to fail.

FALSE

The ROI is always positive

FALSE

The introduction or overview of a project must only include a list of definitions and acronyms

FALSE

A SWOT analysis, being a linear process, cannot be performed using the nonlinear mind mapping technique.

FALSE

A project charter typically does not authorize the project manager to use organizational resources to complete the project.

FALSE

An organization should consider only projects with a negative NPV if financial value is a key criterion for project selection.

FALSE

The organization should complete low-priority projects before high-priority ones, if the low-priority ones take less time.

FALSE

_____ involves identifying, evaluating, and managing changes throughout the project life cycle.

Integrated change control

An annual discount factor is a multiplier for each year based on the discount rate and year.

TRUE

_____ involves identifying and managing the points of interaction between various elements of the project.

Interface management

An organization's information technology project selection process should guide the strategic plan.

FALSE

Corrective actions reduce the probability of negative consequences associated with project risks, while preventive actions should result in improvements in project performance.

FALSE

_____ are new requirements imposed by management, government, or some external influence.

Directives

Which of the following is a proactive process undertaken to reduce the probability of negative consequences associated with project risks? a. Performance reports c. Defect repairs b. Preventive actions d. Corrective actions

B Preventive actions reduce the probability of negative consequences associated with project risks. The problem has not yet occurred. Measures are taken so that problems do not occur.

The _____ stage of information technology planning outlines business processes that are central to achieving strategic goals and helps determine which ones could most benefit from information technology. a. project planning b. business area analysis c. resource allocation d. information technology strategy planning

B The business area analysis outlines business processes that are central to achieving strategic goals and helps determine which processes could most benefit from IT.

_____ involves identifying and controlling the functional and physical design characteristics of products and their support documentation, and ensures that the descriptions of the project's products are correct and complete. a. NPV analysis c. Configuration management b. Project management information systems d. Project time management

C Configuration management ensures that the descriptions of the project's products are correct and complete. It involves identifying and controlling the functional and physical design characteristics of products and their support documentation.

_____ are new requirements imposed by management, government, or some external influence. a. Opportunities c. Problems b. Charters d. Directives

D Directives are new requirements imposed by management, government, or some external influence.

_____ involves coordinating all planning efforts to create a consistent, coherent document. a. Developing the project charter b. Developing the preliminary project scope statement c. Developing the project management plan d. Developing the organizational process assets updates

C Developing the project management plan involves coordinating all planning efforts to create a consistent, coherent document—the project management plan.

A(n) _____ is a formal, documented process that describes when and how official project documents may be modified, the people authorized to make modifications, and the paperwork required for these changes. a. WBS c. performance report b. project charter d. change control system

D A change control system is a formal, documented process that describes when and how official project documents may be changed. It also describes the people authorized to make changes, the paperwork required for these changes, and any automated or manual tracking systems the project will use.

A _____ is a document that recognizes the existence of a project and provides direction on the project's objectives and management. a. stakeholder register c. directive b. risk register d. project charter

D A project charter is a document that formally recognizes the existence of a project and provides direction on the project's objectives and management.

The outputs of the _____ process include change request status updates, project management plan updates, and project document updates. a. initiating b. planning c. executing d. monitoring and controlling

D The outputs of the monitoring and controlling process include change request status updates, project management plan updates, and project document updates.

_____ analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.

Net present value Net present value (NPV) _____ analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.

A(n) _____ is a tool that provides a systematic process for selecting projects based on many criteria.

weighted scoring model

Interface management involves identifying and managing the points of interaction between various elements of a project.

FALSE

A _____ is a document used to coordinate all project planning documents and help guide a project's execution and control. a. project management plan c. scope statement b. statement of work d. business case

A A project management plan is a document used to coordinate all project planning documents and help guide a project's execution and control

_____ should result in improvements in project performance. a. Corrective actions c. Preventive actions b. Defect repairs d. Product acceptance plans

A Corrective actions should result in improvements in project performance

_____ involves working with stakeholders to create the document that formally authorizes a project. a. Developing the project charter b. Developing the preliminary project scope statement c. Developing the project management plan d. Performing integrated change control

A Developing the project charter involves working with stakeholders to create the document that formally authorizes a project —the charter.

In the _____ stage of selecting information technology projects, organizations define project scope, benefits, and constraints. a. project planning b. business area analysis c. resource allocation d. information technology strategy planning

A In the project planning stage of selecting information technology projects, organizations define project scope, benefits, and constraints.

The majority of time on a project is usually spent on _____, as is most of the project's budget. a. execution c. closing b. planning d. monitoring and controlling

A The majority of time on a project is usually spent on execution, as is most of the project's budget.

The first step in determining the NPV is to _____. a. determine the estimated costs and benefits for the life of the project and the products it produces b. determine the discount rate c. calculate the net present value d. determine the cash flow

A The first step in determining the NPV is to calculate the estimated costs and benefits for the life of the project and the products it creates.

_____ is the result of subtracting the project costs from the benefits and then dividing by the costs.

Return on investment (ROI)

Which of the following is true of return on investment or ROI? a. It is always a percentage. c. It is the result of adding the project costs to the profits. b. It is always a positive number. d. The lower it is, the better.

A The ROI is always a percentage. It can be positive or negative.

The first step in the planning process is _____. a. to tie the information technology strategic plan to the organization's overall strategic plan c. to start defining potential IT projects in terms of their scope, benefits, and constraints b. to perform a business area analysis d. to choose which projects to do and assigning resources to work on them

A The first step in the planning process, starting at the top of the hierarchy, is to tie the IT strategic plan to the organization's overall strategic plan.

In a weighted scoring model, the sum of the weights of all the criteria must total _____ percent. a. 10 c. 100 b. 50 d. 150

C In a weighted scoring model, a weight is assigned to each criterion based on its importance to the project. Determining weights requires consultation and final agreement. You can assign weights based on percentages; the weights of the criteria must total 100 percent.

In the _____ stage of selecting information technology projects, organizations select information technology projects. a. project planning b. business area analysis c. resource allocation d. information technology strategy planning

C In the resource allocation stage of selecting information technology projects, organizations select information technology projects.

_____ is a technique that uses branches radiating from a core idea to structure thoughts and ideas.

Mind mapping

A project's internal rate of return can be determined by finding what discount rate results in an NPV of _____ for the project. a. zero c. a hundred percent b. one d. fifty percent

A You can determine a project's internal rate of return (IRR) by finding what discount rate results in an NPV of zero for the project.

_____ analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time. a. Cost of capital c. Cash flow b. Net present value d. Payback

B Net present value (NPV) analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.

Payback occurs when: a. the net cumulative benefits minus costs equal one. c. the net costs are lower than the cumulative benefits. b. the net cumulative benefits equal the net cumulative costs. d. the cumulative benefits are double the cumulative costs.

B Payback occurs when the net cumulative benefits equal the net cumulative costs, or when the net cumulative benefits minus costs equal zero.

The _____ section of the project management plan describes how to monitor project progress and handle changes. a. management objectives c. risk management b. project controls d. technical processes

B The project controls section describes how to monitor project progress and handle changes. Will there be monthly status reviews and quarterly progress reviews? Will there be specific forms or charts to monitor progress?

The business case includes information on _____. a. the business need for the project c. the project objective, high-level requirements, and time and cost goals b. relevant government or industry standards d. policies, procedures, guidelines, and systems that influence a project's success

C Many projects require a business case to justify their investment. Information in the business case, such as the project objective, high-level requirements, and time and cost goals, is included in the project charter.

The project schedule information section of the project management plan includes ____. a. a detailed budget c. an elaborate timetable b. a list of key deliverables d. a directory of staff involved in the project

C The project schedule information section should include a detailed schedule that provides more detailed information about the project schedule. It should reference the schedule management plan and discuss dependencies among project activities that could affect the project schedule.

The _____ section of the project plan should describe the major project functions and activities and identify those individuals who are in charge of them. a. organizational charts b. other organizational or process-related information c. project responsibilities d. management objectives

C This section of the project plan should describe the major project functions and activities and identify the people responsible for them. A responsibility assignment matrix is often used to display this information.

_____ factors include relevant government or industry standards, the organization's infrastructure, and marketplace conditions.

Enterprise environmental

It is necessary that IT project managers have prior technical experience in creating and managing IT products.

FALSE

The number of interfaces in a single project is limited, and does not depend on the number of people involved in the project.

FALSE

_____ include formal and informal plans, policies, procedures, guidelines, information systems, financial systems, management systems, lessons learned, and historical information that can be used to influence a project's success.

Organizational process assets

A(n) _____ involves analyzing a company's strengths, weaknesses, opportunities, and threats, and is used to aid in strategic planning.

SWOT analysis

_____ involves determining long-term objectives by analyzing the strengths and weaknesses, studying opportunities and threats, predicting future trends, and projecting the need for new products and services.

Strategic planning

As projects progress, the organization must reevaluate the need, funding, and will for each project to determine if the project should be continued, redefined, or terminated.

TRUE

In project integration management, directing and managing project execution involves carrying out the project management plan by performing the activities included in it.

TRUE

Information systems can help an organization support a strategy of being a low-cost producer.

TRUE

NPV analysis is a method for making equal comparisons between cash flows for multi-year projects

TRUE

Organizational process asset updates are an important output of the closing process of a project.

TRUE

Payback period is the amount of time it will take to recoup, in the form of net cash inflows, the total dollars invested in a project.

TRUE

Projects that arise as a result of problems and directives must be resolved quickly to avoid hurting an organization's business.

TRUE

A(n) _____ is a methodology that converts value drivers, such as customer service, innovation, operational efficiency, and financial performance, to a series of defined metrics.

balanced scorecard

A(n) _____ is the approved project management plan plus approved changes.

baseline

A category of software that can help align projects with business strategy is called _____ tools.

business service management (BSM)