TPV1 Chapter 3 Review

Frank is proposing a project to management. His project will require $300,000 to be initiated and will last for two years. Considering that the current rate of return is six percent, what must Frank's project be worth in two years as a minimum for management to consider this project?

A. $300,000 B. $300,001 C. $337,080 D. $266,988 Answer: C. You can use the future value formula to determine the minimum amount that Frank's project should be worth. In this instance the formula is $300,000(1.1236), as the interest rate is six percent and the project will last for two years. If Frank's project is worth less than $337,080, it's not a good financial decision for the organization to make.

What is the present value of $575,000 four years from today if the rate of return is six percent?

A. $455,453 B. $609,500 C. $725,924 D. $34,500 Answer: A. The present value can be found by using the formula future value/(1+i)n where i is the interest rate and n is the number of time periods. In this instance, it's $575,000/(1.2624), for a value of $455,453.

Marty is the project manager, though her manager calls her the project coordinator, for her organization. Her manager, Tom, meets with Marty and the project team weekly to assign project work and to review the project work completed so far in the project. The project team members have regular operational work to do in addition to the completion of the project work. What type of an organizational structure is Marty likely a project manager for?

A. Functional B. Weak matrix C. Strong matrix D. Projectized Answer: A. Marty is working in a functional structure. Your clues in the question include that Marty is called a project coordinator—something that's common in a functional structure. Tom's involvement with the project team is another clue that this is a functional structure. Finally, the project team members have regular operational duties to complete, so you can reason that this is not a projectized organization.

You are the project manager for your organization, and you are preparing a presentation for management. This project will help your organization become more efficient and it will help your career as a project manager in your organization. Your audience will include the CEO, customers, and end users. Considering this information, what is the most important thing in your presentation?

A. The audience B. The message C. The technology being presented D. The length of the presentation Answer: B. The most important thing in a presentation is not the audience, it is the message. The presentation must be clear, concise, and to the point. The technology being presented and the time of the presentation are both important elements, but they are not the most important things in the presentation.

You are the project manager of the GHR Project for your organization. This project has just recently been initiated, and the requirements of the project have been agreed upon. Your sponsor would now like you to host a meeting that will review the agreement of the project objectives and establish the direction of the project. What type of a meeting does management want you to host?

A. Workshop B. Scope decomposition session C. Kickoff meeting D. Bidders conference Answer: C. This is a kickoff meeting to discuss the project objectives and establish the project's direction. A kickoff meeting is not an opportunity to request scope changes or debate the project's merit.

Complete the following sentence: Standards are _______________ while regulations are _______________.

A. Guidelines, penalties B. Rules, requirements C. Optional, penalties D. Guidelines, requirements Answer: D. Standards are guidelines while regulations are requirements. You can change or deviate from some standards in a project, but you must always follow the related regulations or there will be fines and penalties.

What role does management play in project management?

A. Hands-on implementation B. Authoritarian C. Support D. Financial watchdog Answer: C. Management should be supportive but not authoritarian or hands on.

Harold is the project manager for his organization. He believes that project teams can be self-led and want to accomplish the project as long as they understand the work they are to complete. Harold believes in challenging the project team and pressing their abilities to learn and do more. What management theory does Harold most likely believe in?

A. Herzberg's Theory of Motivation B. Maslow's Hierarchy of Needs C. McGregor's Theory of X and Y D. The Expectancy Theory Answer: C. McGregor's Theory of X and Y says that X workers are lazy and unwilling to work. Y workers are self-led, have initiative, and are willing to work. Harold demonstrates this belief by putting confidence in his team to complete their project work.

When creating audience handouts for a presentation, what information must be included in the handouts?

A. Information on the profits B. Information on the project manager C. An executive summary D. An implementation plan and timeline Answer: C. Always include an executive summary. As you give your presentation, the executive summary allows the audience to read over the quick facts of the project and get an idea of where the project will end. It also documents the goals and overview of the project for individuals who may not be able to attend your presentation.

You are the project manager for an organization that is a balanced matrix. Your project team members come from many different areas of the organization. Which one of the following is likely a negative component of working in a balanced structure?

A. Lack of project team resources B. Increase in team productivity C. Anxiety for the project team as the project nears completion D. Higher communication requirements Answer: D. Matrix structures have higher communication requirements than the projectized or functional structure. This is because the project team members come from across the organization and are likely to work on multiple projects at once. The project managers must communicate with the functional managers, the other project managers, and the project team members to coordinate schedules, activities, and resource utilization.

You are the project manager for the NHQ Organization. You and several project managers have been invited to present your potential projects to a management committee to determine the worthiness, return on investment, and potential risks. What is the name of this committee that may select your project to be initiated?

A. Murder board B. Organizational governance board C. Technical assessment board D. Project Management Office Answer: A. A murder board is a management-driven board that reviews potential projects to determine which project will likely be the most successful for the organization. An organizational governance board review the policies, procedures, and financial audits of a project.

Management is considering a new project for your organization. This project will likely last for three years with the realization of benefits each quarter the project is in existence. Knowing that the benefits will be available to the company at each quarter, management would you like to examine the value of the project to determine its true worth for the required investment. What type of benefits measurement approach does management want you to complete?

A. Net present value analysis B. Future value analysis C. Cost-benefits ratio analysis D. Management horizon analysis Answer: A. Of all the choices, net present value analysis is the best choice because net present value allows you to consider the cash flow inflow and time value of money for each time period of the project.

You are the project manager for your organization. Your current project is a database upgrade project, and your project team has completed the first phase of the project. Before your project can move forward, management must review the first phase and determine if the project is allowed to transition to phase two. What is this review process called?

A. Organizational governance B. Tollgate approval C. Quality control D. Step funding Answer: B. The review at the end of a phase has many names, but of all the choices only the tollgate approval is the correct choice. While it's true that the tollgate approval is part of organizational governance, organizational governance includes many other components and is not the most exact of all the choices.

If you subscribe to Herzberg's Theory of Motivation, which one of the following must exist as a hygiene agent before you may offer motivating agents to your project team?

A. Paycheck B. Reward C. Bonuses D. Physiological needs Answer: A. Hertzberg's Theory of Motivation defines hygiene agents, which must exist first, as the expectation of the employee. A paycheck must exist for the worker as a hygiene agent before she's likely to be motivated for other rewards and incentives.

Management is considering several projects that they would like to implement. To determine which projects are the best for the organization, management has created six categories to measure each project: profitability, risk exposure, schedule, marketplace conditions, competency required, experience, and efficiency gained. Each project will receive points in each category, and the project with the most points will be selected. What type of benefits measurement approach is being completed in this organization?

A. Scoring model B. Weighted analysis C. Time value of money analysis D. Cost-benefits analysis Answer: A. A scoring model is a benefit measurement method that assigns points to defined categories of projects. The project which receives the most points is the project that is selected, funded, and initiated. Incidentally, project managers can use a scoring model when it comes to vendor selection as part of the procurement process.