Chapter 2 Quiz

Peter Jackson

What famous film director viewed three movies as part of a program instead of separate projects to save a lot of time and money? (Hint: Lord of the Rings)

False

With respect to NPV, all organizations start discounting in Year 0 (immediately).

Return on investment

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

Portfolios

____ should be formed and continuously updated to help the organization as a whole make better strategic decisions.

30%

Given discounted benefits of $130,000 and discounted costs of $100,000 your ROI is ____.

68

If a weighted score for a project is based on just two criteria, fit with strategy, weighted 60% and ROI, weighted 40%, what would be the weighted score for a project with scores of 80 on fit with strategy and 50 on ROI?

True

Just as projects are unique, so are project portfolios.

False

Low- or medium-priority projects that can be finished in less time than high-priority projects should always be completed first.

funding

One method for selecting projects based on broad organizational needs is to first determine whether they meet three important criteria: need, ____, and will.

discount

A ____ rate is the rate used in discounting future cash flows.

economies

A construction firm using ________ of scale can purchase materials, obtain services, and hire workers for less money if it is managing the construction of 100 houses instead of just one house.

venture

A project in the ____ category could help transform the business.

time

According to the ____ value of money, a dollar today is worth more than a dollar tomorrow.

positive

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

False

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

less than

Assuming the value of a dollar is worth more today than in the future, the net present value of a multi-year project should be _______ the sum of its cash flows.

False

Organizations should only pursue projects that have the best financial value.

strategic planning

The first step in the four-stage planning process for projects is ____.

project

The goal of ____ portfolio management is clear: to help maximize business value to ensure enterprise success.

enterprise success

The goal of project portfolio management is to help maximize business value to ensure _______________.