Chapter 4

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

a. True

17. 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. a. True b. False

a. True

19. Some organizations initiate projects using a contract in place of a project charter. a. True b. False

a. True

21. A summary of the planned approach for managing the project should describe stakeholder needs and expectations, important assumptions, and constraints. a. True b. False

a. True

25. Change requests are always made in writing. a. True b. False

a. True

26. Organizational process asset updates are an important output of the closing process of a project. a. True b. False

a. True

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

a. True

9. 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. a. True b. False

a. True

52. What actions result in improvements in project performance? a. Corrective. b. Defective c. Preventive. d. Acceptance plan

a. Corrective.

27. Which process 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

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

a. It is always a percentage.

45. Which is an example of an organizational process asset? a. Management systems b. The organization's infrastructure c. Government standards d. Marketplace conditions

a. Management systems

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

a. True

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

a. True

14. NPV analysis is a method for making equal comparisons between cash flows for multi-year projects. a. True b. False

a. True

37. What is the first step in determining the NPV? 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. determine the estimated costs and benefits for the life of the project and the products it produces

51. What is the majority of time on a project is usually spent on? a. execution b. planning c. closing d. monitoring and controlling

a. execution

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

a. project management plan.

32. Which process includes defining project scope, benefits, and constraints? a. project planning b. business area analysis c. resource allocation d. information technology strategy planning

a. project planning

47. Which section of the project plan lists the planned dates for completing key deliverables? a. schedule b. closing c. budget d. objectives

a. schedule

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

a. tie the information technology strategic plan to the organization's overall strategic plan

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

a. zero

10. Opportunities and directives are essentially the same thing. a. True b. False

b. False

12. The organization should complete low-priority projects before high-priority ones, if the low-priority ones take less time. a. True b. False

b. False

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

b. False

16. The ROI is always positive. a. True b. False

b. False

18. A project charter typically does not authorize the project manager to use organizational resources to complete the project. a. True b. False

b. False

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

b. False

20. Many projects fail because of unclear requirements and expectations, so starting with a payback analysis makes a lot of sense. a. True b. False

b. False

22. A Gantt chart is the same as a project management plan. a. True b. False

b. False

23. It is necessary that IT project managers have prior technical experience in creating and managing IT products. a. True b. False

b. False

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

b. False

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

b. False

4. Project integration management must occur just within the context of a particular project. a. True b. False

b. False

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

b. False

6. An organization's information technology project selection process should guide the strategic plan. a. True b. False

b. False

8. Projects that address broad organizational needs are likely to fail. a. True b. False

b. False

35. What type of analysis involves 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 b. Net present value c. Cash flow. d. Payback

b. Net present value

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

b. Preventive actions

40. When does payback occur? a. When the net cumulative benefits minus costs equal one b. When the net cumulative benefits equal the net cumulative costs c. When the net costs are lower than the cumulative benefits d. When the cumulative benefits are double the cumulative costs

b. When the net cumulative benefits equal the net cumulative costs

48. Which section of the project management plan provides the planned cost of deliverables? a. objectives b. budget c. risk d. technical

b. budget

31. Which 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. business area analysis

36. What term is used for benefits minus costs? a. cost of capital b. cash flow c. discount factor d. opportunity cost of capital

b. cash flow

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

c. 100

28. Which process 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. Developing the organizational process assets updates

c. Developing the project management plan

44. Which information is included in a business case? a. business need for the project b. relevant government or industry standards c. project objective, high-level requirements, and time and cost goals d. policies, procedures, guidelines, and systems that influence a project's success

c. project objective, high-level requirements, and time and cost goals

50. Which section of the project management plan includes external interfaces, internal structure, as well as roles and responsibilities? a. overview b. technical processes c. project organization d. supporting processes

c. project organization

33. Which process involves selecting information technology projects and assigning resources? a. project planning. b. business area analysis c. resource allocation d. information technology strategy planning

c. resource allocation

34. What are new requirements imposed by management, government, or some external influence referred to as? a. Opportunities b. Charters c. Problems d. Directives

d. Directives

54. An IT company revises its process parameters in response to complaints from vendors that products were not ready on time. Which is this an example of? a. cost forecasting. b. a preventive action c. defect repairs d. a corrective action

d. a corrective action

55. Which term is used for 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 b. project charter c. performance report d. change control system

d. change control system

29. The outputs of which 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. monitoring and controlling

43. Which document recognizes the existence of a project and provides direction on the project's objectives and management? a. stakeholder register b. risk register c. directive d. project charter

d. project charter

39. What term is used for the minimum acceptable rate of return on an investment? a. capitalization rate. b. internal rate of return c. discount rate d. required rate of return

d. required rate of return

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

d. technical processes