Project Management Exam 1
A company has investment criteria that projects over $200,000 must have a payback of no more than 4 years. For a $1,200,000 project, asuuming that the cash flows each year are the same, what number represents an acceptable annual project net cash flow that meets the criteria?
$330,000
Your company is taking on a project that requires an initial investment of $9,000 and expects to receive $3,100 of net benefit a year for the following 4 years. If the discount rate is 15%, what is the net present value (NPV)?
($149.57)
The backward pass in project network calculations helps to determine the (select two answers) -the critical path -Latest time activities can begin -if there are enough resources on the project -Earliest time activities can be finished
-the critical path -Latest time activities can begin
A project has a NPV of $543 when using a discount rate of 9% and an NPV of ($2,325) when using a discount rate of 16%. The IRR associated with the project is likely to be approximately: (no math required) 1) 15% 2) 8% 3) 18% 4) 11%
11%
An activity has a duration of 10 days. Its early start is 4 and its late start is 6. This activity has _____ days of total slack. 10 14 16 2
2
There are 50 students that arrive at the bookstore every hour. The average time that the student spends at the bookstore is about 30 minutes (0.5 hour). How many people will be in the store at any given time? -50 students -Can not be determined from data provided -100 students -25 students
25 students
An expected tangible or intangible output over the course of a project would be classified as -A deliverable -A target -An objective -A product
A deliverable
What is a stakeholder? -A person or organization that is actively involved in the project, or whose interests may be positively or negatively affected by execution or completion of the project. -A person or organization that is not actively involved in the project, or whose interests will not be affected by execution or completion of the project. -An organization that's hired to perform risk analysis. -The person responsible for preparing the project budget.
A person or organization that is actively involved in the project, or whose interests may be positively or negatively affected by execution or completion of the project.
Within the Statement of Work, the statement: "To construct a high-quality, custom home within five months at costs not to exceed $150,000" is best classified as: -A strategy -An approach -A milestone -An exclusion -A project objective / goals
A project objective / goals
You are managing the project of planning a party for your company employees. There is a risk that the employees will not come to the party. You decide to not take any action against this as the likelihood of this is low. Which risk response strategy are you following? -Accept -Transfer -Avoid -Mitigate -Exploit
Accept
You and the project team are in the process of identifying stakeholders prior to beginning project planning. You decide to try to collect, quantify and graph information about the stakeholders to assess how to best manage the communication and their involvement. Which of the following tools will you use? -RACI diagram -Answer Power/interest Grid -Impact / Likelihood Matrix -FMEA Analysis
Answer Power/interest Grid
_______ reserves are identified for specific work packages and are distributed by the project manager and the team members: -Management -Contingency -Buffer -Budget -Trigger
Budget
Resource leveling techniques involve: -Using negative slack -Delaying critical activities -Delaying the project -Delaying non critical activities -Adding resources
Delaying non critical activities
Which of the following correctly calculates the early finish for an activity? ES + SL LF - DUR ES + DUR LS + DUR LF + SL
ES + DUR
Once a change has been requested what is the next step in the change control process? -evaluate the change -advise the sponsor -update the change log -update the project plan
Evaluate the change
If a risk event has an 80% chance of occurring and the consequence will be $10,000, what does $8,000 represent? -Expected monetary value -Present value -Risk value -Management value
Expected monetary value(EMV)
The net present value model measures the time it will take to recover the project investment: T/F
False
Scope creep occurs when your project is completed over-budget: T/F
False (it's possible for projects to go over budget in spire of all the items being delivered being within the agreed scope)
The need for a freshly poured foundation to cure before beginning construction is an example of which of the following type of lag? Start to start Start to finish Finish to finish Correct! Finish to start
Finish to Start
The five stages in team development according to Tuckman's ladder are: -Forming, norming, reforming,performing, adjourning -Forming, storming, norming, performing, adjourning -Forming, storming, norming, reforming, adjourning -Planning, forming, storming, performing, adjourning
Forming, storming, norming, performing, adjourning
Which of the following is the most important factor to consider in deciding whether to use a fixed price or variable contract? -How well defined the scope is -The expected duration of the project -The expected value of the contract -Relevant environmental regulations
How well defined the scope is
Which of the following is true regarding the internal rate of return? -IRR assumes reinvestment at the cost of capital -IRR is a constrained optimization method -IRR is generally easier to calculate than the payback method of financial selection -IRR takes into account the time value of money
IRR takes into account the time value of money
The least accurate estimates are likely to come during what project phase? Executing Initiating Closing Planning
Initiating
The project manager is monitoring the project schedule. She notes that the work activity that is now two days behind schedule is an activity that's on the critical path. Which statement below is correct regarding variance on the critical path? -It will not have a direct impact the project end date -It will have a direct impact on the project end date. -It will not have a direct impact on vendors -It will have a direct impact on quality.
It will have a direct impact on the project end date.
If one of the elements of the triple constraint is changed but the other two are not, what is the general consequence? 1) The project will never be completed 2)Stakeholders are generally willing to overlook the impact to the project 3)It genreally can be overcome with good project management 4)It's likely to cause quality of the project to suffer
It's likely to cause quality of the project to suffer
You would typically expect to find the statement "not enough participants sign up" in the _________________ section of a Statement of Work: -Assumptions -Requirements -Deliverables -Key risks -Objectives
Key risks
When scheduling activities in a resource-constrained project, typically the activity scheduled first has the __________ amount of slack. -Least -Most -Equal
Least
The fact that you need to pour a foundation before a house is framed and complete framing before a roof is placed demonstrates what type of constraint? (think about the tasks) -Scope -Logical -Time -Resource
Logical
Barca is a stakeholder with high interest in the project and has power to change the outcome of the project if he is not satisfied with the outcome. What is the best strategy to manage Barca? -Make sure he is aware of the project early on and ensure that multiple communication modes are used -Tell him that in order to stay within schedule, scope is fixed now that the project charter / statement of work is complete -Keep him informed through your weekly project status reports -Bring in Barca whenever you feel like there's an issue that he should be involved in
Make sure he is aware of the project early on and ensure that multiple communication modes are used
The Work Breakdown Structure (WBS) usually: -Makes it easier to assign resources to activities -Determines the project requirements -Provides information about risk response tasks -Defines the objective and assumptions/constraints -Defines the project priorities
Makes it easier to assign resources to activities
Significant events in a project that occur at a specific point in time, are natural control points, and are easily recognized by project participants are known as ___________. -Requirements -Milestones -Deliverables -Project scope
Milestones
A project to expand a manufacturing park will force Joe's Hamburger Shack to relocate. Joe does not wish to relocate. His interests are best served if the project never begins. Joe is a: -Negative stakeholder -Functional stakeholder -Positive stakeholder -Project sponsor -Project manager
Negative stakeholder
All of the following are outcomes of resource constrained scheduling EXCEPT... -The network may become more sensitive with more near critical paths -New logical relationships between tasks are created -There is a loss of flexibility due to the reduction of slack -Scheduling becomes more complex with resource constraints -The duration of the project may increase due to maximum limits on resources being used
New logical relationships between tasks are created
In which of Tuckman's Team Development Stages do members resolve status conflicts and learn to work as a cohesive team? Adjourning Storming Performing Forming Norming
Norming
Which of the following is not one of the typical responsibilities of a project manager? -Working with vendors and supplies -Taking responsibility for cost, time, scope trade-offs -Overseeing existing operations -Managing a temporary activity -Providing guidance & coaching to project team members
Overseeing existing operations
During the _____ stage of a project life cycle, the project's schedule and budget will be determined. 1) Defining 2)Planning 3)Executing 4) Testing 5) Closing
Planning
A ______ is a group of related projects that are managed in a coordinated way. -initiative -project collection -program -portfolio?
Program
This type of change results in the most resistance and concern among affected team members -Simple change -Radical change -Transitional change -No change
Radical change
Rafael is working on a project that technically allows three activities to be done at the same time. If they were to be implemented at the same time, he would need 5 contractors in order for the activities to be completed on time. There are only 3 available. This is an example of what type of constraint? -Resource -Scope -Work -Network -Time
Resource
Sean was told that there are only two design engineers that she can use for her project. Her project is classified as __________ constrained. Resource Time Quality Performance Cost
Resource
An example of a project deliverable might be -Employee satisfaction survey -Compliance document -Range Extending Battery System -Risk management plan -User manual
Risk management plan
Which of the following is NOT part of the general definition of a project. 1) Consumption of resources 2) Routine activities 3) A well defined objective 4) Existence of constraints
Routine activities
Which of the following is not one of the classifications for assessing a project portfolio relative to risk and reward? 1) sacred cow 2)white elephant 3) pearl 4) bread & butter 5) oyster
Sacred cow
The first reaction to change, according to Kubler-Ross, is that of -Depression -Anger -Acceptance -Shock & denial -Bargaining
Shock & denial
All of the following are potential consequences of gold plating a project EXCEPT: -Increasing project risk -Going over budget -Adding unnecessary & unasked for features -Shortening the duration of the project
Shortening the duration of the project
The critical path in a project network represents the: -Shortest amount of time the project will take -Best way to plan through the network -Network activities with the most merge activities -Network activities with the most cost
Shortest amount of time the project will take
The costs of a risk event occurring during the project lifecycle typically -Slowly rise as the project progresses -Drop sharply and then level out -Rise sharply and then level out -Remain the same throughout the project -Drop slowly as the project progresses
Slowly rise as the project progresses
Resource ______________ describes how resources can be adjusted for time constrained projects. -loading -leveling -heuristics -smoothing
Smoothing
When work in an activity is interrupted to work on another activity and is then resumed at a later point in time, it is called _________. Smoothing Leveling Splitting Constrained
Splitting
In a resource-constrained project, which of the following is most likely to be changed? Resource levels The budget The completion date Project quality The scope
The completion date
The required minimum rate of return on a project investment ina NPV(discounted cash flow) analysis is called _______. 1) profitability index rate 2) the payback period 3) the acceptance rate 4) the hurdle rate
The hurdle rate
In planning, what an important consideration that is often ignored when using splitting as a way to manage resources? -The impact of start up and shut down costs -Changes to network logic -The benefit of cost savings -The impact to project scope
The impact of start up and shut down costs
Which of the following is NOT one of the driving forces behind the increasing demand for project management? -Increasing need for multi-project management -Compressed timelines -The mass production of commodity products -A explosion in knowledge
The mass production of commodity products
You are developing a project scope statement for a cross functional project. Many people will be involved in this large, strategic undertaking. Who would likely have the final approval over the project scope statement that has been developed? -The project sponsors -The project team members -The project manager -The project selection committee -The financial manager
The project sponsors
A resource constrained project assumes that -Time is not allowed to change -Resources may be added -The network diagram logic can be changed -Time is allowed to change
Time is allowed to change
Reasons why estimating time and cost are important include all of the following EXCEPT: -To identify the project stakeholders -To determine how well a project is progressing -To determine how long the project should take and cost. -To anticipate cash flow needs -To schedule work
To identify the project stakeholders
The main purpose of a risk register is to: -Satisfy stakeholder needs for risk reporting -Record detailed analysis results from quantitative simulation models -Identify the level of risk reserves required -To record and track risks in sufficient detail to enable them to be understood
To record and track risks in sufficient detail to enable them to be understood
It is possible for a project to have multiple critical paths: T/F
True
Which of the following question does an organization's mission statement answer? -What should be our profit growth for the next 5 years. -Where should we locate our headquarters? -What are our long term goals & objectives? -What do we aspire to become? -What should our stock price target be?
What do we aspire to become?
When should a project team decide to avoid a risk? -When the risk event has a low probability of occurrence or low impact -When the risk event is unacceptable, one with a very high probability of occurrence and high impact -When it can be transferred by purchasing insurance -A risk event can never be avoided
When the risk event is unacceptable, one with a very high probability of occurrence and high impact
In looking at a portfolio of projects, what type of projects do companies tend to have too many of? Constrained White elephants Bread & butter Pearls Oysters
White elephants
The relationship between work, duration and resource units is: -Work = Duration * Resource Units -Work = Duration / Resource Units -Resource Units = Duration & Work -Duration = Work * Resource Units
Work = Duration * Resource Units
Upon the approval of a project proposal, a project manager has been assigned to a new project to refurbish an office block. What is one of the first things that the project manager should do? -Estimate the initial budget for the project work -Write and gain approval of a statement of work -Develop a work breakdown structure -Produce a project schedule for the required work
Write and gain approval of a statement of work
A ground excavation project is expected to last for a period of four months. All project work must cease on rainy days. When preparing the SOW, possibility of the rain causing a project delay should be cited as: -a deliverable -a risk -a task -an assumption -an exclusion
a risk
Requirements are generally... -defined by the project manager -the result of stakeholder analysis -a statement of the need(s) that the project has to satisfy -identifying needs that may be outside the original scope of the project
a statement of the need(s) that the project has to satisfy
An advantage of parametric estimating over top down estimating methods is: -ability to incorporate new work items -accuracy -independence from historic data -speed
accuracy
The project manager completed development of the schedule model and it has been approved. From here forward, the schedule model can be changed only through formal change control procedures. It will now be used as a basis for comparison to actual results. The project schedule is: -baselined but can be modified with a change control -diagrammed -set in stone and can never be changed -fast tracked -compressed
baselined but can be modified with a change control
A member of the executive management team asked whether the project is worth the required investment. One way for her to find the answer is to review the: -Risk identification & analysis -scope statement -work breakdown structure -parametric estimates -business & financial case
business & financial case
A good use of the work breakdown structure is to: -Identify when a project will be completed -show the business need for the project -show the hierarchical reporting relationship for each project team member -communicate what tasks need to be completed for the project
communicate what tasks need to be completed for the project
After developing requirements, all o the following are enabled EXCEPT for: -creating a project scope statement -communicating specifics of what is needed of the deliverables -enabling testing and validation that the deliverables meet the criteria established -the creation of a work breakdown structure
creating a project scope statement
In determining which hotel I want to stay at, I want to choose a property that offers free breakfast, has a pool, costs between $50 and $100 per night and is within 10 miles of the beach. This type of selection is known as: -financial based selection -weighted criteria selection -must have selection -criteria based selection
criteria based selection
The delaying of an activity by 3 days on the __________ will delay the completion of the project by the same amount. Critical path Slack Merge activities Parallel activities Laddering activities
critical path
An FMEA uses a severity score, an occurrence/probability score and a ________________________ detection score monetary score failure score value score
detection score
During development of the communications management plan, it is important to account for communication with the project stakeholders. The best practice is to: -plan an online repository for the project documentation so the stakeholders can view information when they want it -call the stakeholders each time there's a change on the project -determine the stakeholder requirements for communications, then develop a plan for managing the flow of project information -avoid verbal communication so that everything is well documented -ensure that only stakeholders that can positively impact your project are communicated to
determine the stakeholder requirements for communications, then develop a plan for managing the flow of project information
The network diagram: -Illustrations the flow of project team member communication -provides information on schedule performance -determines the requirements of a project -displays the logical relationships between project activities
displays the logical relationships between project activities
In managing effective change, communication styles should reflect the stage of the change curve the affected team is in. Clarity in communication and overcommunication is most relevant during: -the valley of despair -when the team is angry and depressed about the change -as the team has begun to accept and integrate the change in their work -early on during the change process
early on during the change process
Washing dishes after dinner is estimated to take 30 minutes for Claus. If Anna and Claus both wash dishes, it will take 15 minutes. This is an example of a __________ task. fixed cost fixed duration fixed work fixed resource
fixed work
You should more worried about projects with.... -low likelihood values, low impact values -high likelihood values, high impact values
high likelihood values, high impact values
The best way to visualize the peaks and valleys of resource demand over the duration of a project is through -a gantt chart -a histogram -a task sheet -a calendar
histogram
The parallel method is a(n) ____________________ approach to solve for ___________ constrained projects. -iterative, time -iterative,resource -linear, time -linear,resource
iterative,resource
In a fixed price contract, the risk: -lies more with the provider / seller -lies more with the client / buyer -is equally shared -depends on the situation
lies more with the provider / seller
A _________ activity has more than one dependency arrow flowing into it -critical path -burst -merge -conditional -looping
merge
The Shiny New project concerns the custom development of a complex business application. The primary purpose of project is to create a forecast for the amount of steel a manufacturing plant must purchase, 90 days before they need it. Today, the in-progress application was presented to the client and the ability of the application to make the required forecast was validated. The Shiny New project, reached a major -milestone -deadline -key performance indicator -lag -lead
milestone
________ activities must be completed immediately before a particular activity looping parallel successor predecessor conditional
predecessor
The statement "the emergency system will identify the caller's phone number and location within 3 seconds" is considered to be a: -objective -milestone -requirement -risk -project limit
requirement
In a time constrained project, the end date can not be changed. Therefore, the project manager's primary goal should be to produce a level _____________ profile. -requirements -schedule -resource -scope -deliverables
resource
Top down estimating is a useful technique for ____________ -when the customer wants detail on the estimate -when the project work is being done by a 3rd party -when cost & time is important -small, internal projects
small, internal projects
To create the Work Breakdown Structure, the project team should: -lump together the related work activities to better manage them. -lump together the related project deliverables into larger project phases. -subdivide the project budget to fit each project phase. -subdivide deliverables and work into smaller, more manageable components
subdivide deliverables and work into smaller, more manageable components
Risks are prioritized based on -Running a net present value calculation -the order in which they are identified -the likelihood and impact of the occurrence -the priorities set by the executive sponso
the likelihood and impact of the occurrence
The highest element in the hierarchical breakdown of the WBS is: -the work package -the requirement -the project -subdeliverables -the deliverable
the project
For which reason is a project manager most likely to perform stakeholder analysis? - to align and understand stakeholder expectations -to set the appropriate budget -to delay the project start date -to ensure the project work complies with federal and state regulations -to identify project assumptions that need to be revisited
to align and understand stakeholder expectations
Documenting approved changes to a project is a good practice. This concept allows the project to have ________________ over the course of the project life cycle. -traceability -RACI -analysis -stakeholder management -risk management
traceability
A construction project requires timber that was procured in advance and placed in storage. While the timber was being placed for storage, it was identified that the warehouse flooded in the past. To cover the risk of loss, the project manager bought an insurance policy. With respect to this potential negative risk, the project manager: -transferred the risk -accepted the risk -avoided the risk -mitigated the risk -enhanced the risk
transferred the risk
Purchasing insurance is a form of ______ risk: transferring mitigating accepting avoiding exploiting
transferring
A recent change request was approved by the change control board. The change involves an increase in the amount of project work. The project manager should -update the project documents to reflect the change -reject the new work -defend the originally approved project management plan -stop the project for clarification
update the project documents to reflect the change
What is the duration of a milestone?
zero
