PMP Practice Questions

An organization has 2 projects to choose from: Project A with an Net Present Value (NPV) of $45,000 and Project B with NPV of $85,000. What is the opportunity cost of selecting Project B?

$45,000 Opportunity given up by selection one project over another. Value of project not selected

Read each description of a PMO. Determine whether it is likely to be supporting, controlling, directive, or a combination. 1) Manages all projects throughout the organization 2) Provides support and guidance; requires all projects within the organization to use designated project management software and templates, but doesn't otherwise exert control over the project 3) Coordinates all projects within the organization 4) Recommends common terminology, templates, reporting, and procedures to e used on projects throughout the organization to promote consistency and streamline efforts 5) Appoints project manager 6) Prioritizes projects 7) Has the highest level of control over projects

1) Directive 2) Controlling 3) Controlling or Directive 4) Supportive 5) Directive 6) Controlling or Directive 7) Directive

Review the activities below, and determine whether they are mainly leadership or management based. 1) Human resource management 2) Career planning 3) Team time tracking 4) Team member recognition 5) Task assignment 6) Team brainstorming 7) Planning workshops 8) Negotiating a contract

1) Management 2) Leadership 3) Management 4) Leadership 5) Management 6) Leadership 7) Leadership 8) Management

Which Project would you pick based on the information provided? 1) Net Present Value Project A: $95,000 Project B: $75,000 2) Internal Rate of Return (IRR) Project A: 13% Project B: 17% 3) Payback Period Project A: 16 months Project B: 21 months 4) Benefit-Cost Ratio Project A: 2.79 Project B: 1.3

1) Project A 2) Project B 3) Project A 4)Project A

1) Under what circumstances would you use a network diagram? 2) Under what circumstances would you use a milestone chart? 3) Under what circumstances would you use a bar chart?

1) Show interdependencies b/w activities; critical path, show length of project 2) Report to senior management or the client 3) Track progress to report to the team

Identify which team model belongs to the following statements 1) Unconsciously finding an individual path 2) Primary Need: Achievement. "They like recognition" 3) Motivating Agents 4) Self-actualization: self-fulfillment, growth, learning 5) Hygiene Factors 6) Choices/ Consequences 7) Primary Need: Affiliation. "they seek approval rather than recognition" 8) Obeying the rules 9) Esteem: accomplishment, respect, attention, appreciation 10) Outcome

1) Shu-ha-ri 2) McClelland's Theory of Needs 3) Herzberg's Two-Factor Theory 4) Maslow's Hierarchy of Needs 5) Herzberg's Two-Factor Theory 6) OSCAR 7) McClelland's Theory of Needs 8) Shu-ha-ri 9) Maslow's Hierarchy of Needs 10) OSCAR

What is the best type of communication in the following situations? 1) Updating project communications strategies 2) Giving presentations to management 3) Trying to solve a complex problem 4) Updating the product backlog 5) Making notes regarding a telephone conversation 6) Making changes to a contract 7) Scheduling a meeting 8) Clarifying a work package 9) Requesting additional resoruces 10) Trying to discover the root cause of a problem 11) Sending an email to ask for clarification of an issue 12) Holding a milestone party 13) Conducting an online bidder conference

1) formal written 2) formal verbal 3) formal written 4) formal written 5) informal written 6) formal written 7) informal written 8) formal written 9) formal written 10) informal verbal 11) informal written 12) informal verbal 13) formal written

Determine which conflict resolution technique is being used. 1) Do it my way 2) Let's calm down and get the job done 3) Let us do a little of what both of you suggest 4) Let's deal with this issue next week 5) Miguel and Kathleen, both of you want this project to cause little distraction to your departments as possible. With that in mind, I am sure we can come to an agreement on the purchase of equipment and what is best for the project.

1. Forcing 2. Smoothing 3. Compromising 4. Withdrawal/avoidance 5. Smoothing

You have a late start of 30, an early start 18, and a late finish of 34. What is the float?

12 Late Start (30) - Early Start (18) = 12

Determine which conflict resolution technique is being used. 6) We have talked about new computers enough. The decision has been made to not get them. 7) Miguel, you say the project should include the purchase of new computers, and Kathleen, you say the project can use existing equipment. I suggest we perform the following test on the existing equipment to determine if it needs to be replaced. 8) Let's see what everyone thinks, and try to reach a consensus. 9) Since we cannot decide on the purchase of new computers, we will have to wait until our meeting next month. 10) Miguel, what if we get new computers for the design activity on the project and use the existing computers for the monitoring functions?

6. Forcing 7. Collaborative 8. Collaborative 9. Withdrawal/avoidance 10. Compromising

Austin has been waiting on a response about a submitted change request to come in from the change request board. After several days, the change request board informs him that the change request has been rejected. This causes Austin to be concerned as this will lengthen the timeline of an activity in his schedule. What should he do first? A) Update the change log B) Alert the project sponsor C) Find a workaround D) Find a vendor to perform the work

A

Marc prefers to lead his team through problem-solving in a very engaging way. He gathers all of the team members in the war room and asks them to discuss the problem and arrive at a decision as a group that the team then owns. Marc's leadership style would be described as: A) Democratic B) Analytical C) Consultative D) Consensus

A

The project scope statement is decomposed into the work breakdown structure. The WBS then becomes an important part of the project for planning, execution, and control. A WBS serves as an input to many of the project processes. Of the following, which is not true? A) WBS is an input to plan cost management B) WBS is an input to control procurements C) WBS is an input to risk identification D) WBS is an input to cost budgeting

A

The senior web designer on a project just came down with the flu in the middle of an iteration. What should the project manager do? A) Meet with the team to find out how much of the planned work will be done. B) Ask the two other designers to work overtime this week. C) Ask the product owner to postpone the product demo until the iteration goal is done. D) Call the web designer's functional manager and ask for a new designer for the rest of the iteration.

A

You are the project manager for the DGF Project. This project is to design and implement a new application that will connect to a database server. Management of your company has requested that you create a method to document technical direction on the project and to document any changes or enhancements to the technical attributes of the project deliverable. Which one of the following would satisfy management's request? A) Configuration Management B) Integrated Change Control C) Scope Control D) Change Management Plan

A

You are the project manager for the construction of a new hotel. Before you begin the cost budgeting process, what is needed? A) Cost estimates and project schedule B) Cost estimates and supporting detail C) EAC and BAC D) A parametric model used to arrive at the costs submitted

A

The project team has completed the scope baseline and has started to break down each of the work packages in into individual activities. What process should the team do next? A) Sequence Activities B) Define Scope C) Create WBS D) Define Scope

A Define Scope - complete (scope) Create WBS - complete (scope) Define Activities - complete (schedule) Sequence Activities is next

Beth is a great application developer and has been in that role for 12 years. Because of her experience, she would make a great project manager of an application development project. What does this scenario best describe? A) Halo Effect B) Coercive Power C) Expert Power D) Halo Power

A The perception that Beth would make a great project manager of an application development project solely because she has been an application developer is an example of the halo effect.

You are the project manager of the JHG Project. This project has 32 stakeholders and will require implementation activities in North and South America. You have been requested to provide a duration estimate for the project. Of the following, which will offer the best level of detail in your estimate? A) Resource Calendar B) An Order of Magnitude C) Requirements Document D) Stakeholder Analysis

A This is an input for Estimate Activity Durations (schedule, planning)

Alyssa is a ScrumMaster at an engineering firm with a weak matrix. While on a break, she finds an article from a business partner's firm that states that they will be giving a large discount on the tools that Alyssa's organization relies on. How should Alyssa proceed? A) Alyssa should alert the product owners that rely on this software B) Alyssa should do nothing as she does not have procurement responsibilities or authority C) Alyssa should alert her PMO to this opportunity D) Alyssa should contact the business partner to take advantage of this opportunity

A This is because not only does Alyssa not have procurement powers, neither would her PMO in a weak matrix. Alyssa does have the power to share this knowledge with the product managers; doing nothing would cause the organization to miss this opportunity.

While working on a complex web design project, the manager has received a change request from a senior stakeholder to fix a problem with the current intranet server. The project manager has determined that this change is outside the scope of the project and is not covered by the work listed in the project charter. What should the project manager do next? A) Inform the stakeholder that this change request should be considered a new project B) Inform the stakeholder that the change will incur a significant cost and time increase C) Pass the change to the control board D) Ignore the change request

A Although all change requests should be considered by the project manager, they should be related to the project work. No change should be approved if it is outside the scope of the project charter, since that would not be considered work within the current project.

Your company has decided to roll out a new Wi-Fi network for the staff. The sponsor has informed you that encryption on the network is mandatory. Where will the project manager document that the encryption was mandated by the sponsor? A) Requirements Traceability Matrix B) Requirements Documentation C) Scope Baseline D) Scope Statement

A The requirements traceability matrix will trace the requirements back to their origins. The project scope statement, scope baseline, and requirements documentation will not include where requirements came from.

A major portion of a large construction development project was completed by a contractor. The contractor has completed all the work listed in the agreement but also completed other work the contractor felt had to be done. The contractor is asking for more money that was not listed in the agreement, and the project manager feels that what they're asking for is too much for the additional work that was completed. What should the project manager do next? A) Contact claims administration B) Inform the contractor the project budget does not have the additional funds for the work C) Tell the contractor they should not have done additional work D) Inform the sponsor

A When there is a dispute between a buyer and a seller for additional funds, the dispute should be resolved by going to the claims administration, who can then facilitate the dispute.

Several stakeholders have different opinions about the product requirements. Which two of the following techniques could the project manager use to bring the group to consensus? A) Facilitated workshop B) Interview C) Backlog refinement session D) Observation E) Survey F) Mind Mapping

A, C

Your team can create a solution for $245,600 and it will cost $23,500 per month to support. A vendor promises that you can purchase their solution for $12,000 but you'll have a monthly fee of $49,000. When could your solution be a better financial decision than the vendor's offer?

After 9.1 months it is better to build $245,600 (build cost) - $12,000 (vendor cost) = $233,600 $23,500 (build monthly) - $49,000 (buy monthly) = $25,500 233600/25500 = 9.1 months If you use product for less than 9.1 months, better to buy If you use product for more than 9.1 months, better to build

Michael is the project manager of the 78GH Project. This project requires several members of the project team to complete a certification class for another project the week of November 2. This class causes some of the project activities on Michael's activities to be delayed from his target schedule. This is an example of which of the following? A) Hard logic B) External dependency C) Soft logic D) Conflict of interest

B

The PMO at your firm has informed you that under certain circumstances, a typical, competitive procurement process may not be necessary. Under which circumstances would this be the case? A) Project AKF requires standard woodworking skills and has a predefined scope and schedule B) Project IDS has a scope component that requires a patent from a unique vendor C) The manager of project OIC is familiar with several vendors who specialize in the required services D) Project DIS has a large budget

B

The WBS, estimates for each work package, and the network diagram are completed. The next thing for the project manager to do is: A) Sequence Activities B) Develop Schedule C) Validate Scope D) Resource Simulation

B

The seller has presented the project manager with a formal notification that the seller has been damaged by the buyers activities. The seller claims that the buyer's slow response to the requested approvals has delayed the project and has caused the seller unexpected expense. The first things the project manager should do are: A) Collect all relevant data, send the data to the company attorney, and consult with the attorney about legal responses B) Review the contract for specific agreed-upon terms that relate to the issue, see if there is a clear response, and consult an attorney if needed C) Review the procurement statement of work for requirements, send a receipt of claim response, and meet to resolve the issue without resorting to legal action if possible. D) Hold a meeting with the team to review why the acceptances have been late, make a list of the specific reasons, and correct those reasons.

B

You are managing an interior decorating project. The walls are scheduled to be painted immediately after the primer. You have allowed 36 hours between the primer activity and the painting activity to ensure that the primer has cured. This is an example of which one of the following? A) Lead B) Lag C) Soft Logic D) Finish to Start Relationship

B

Your next project involves managing an agile initiative to distribute new driver management software to your firm's taxi fleet. At this point the project steering committee is debating whether to contract with a usability testing service for the project. They ask for your input on whether this would be cost-effective. You reply that while you don't have the specific data yet, as a general rule: A) The most economical time to test would be near the end of the project when the screens are done and less likely to change. B) Finding issues earlier is always preferable since it is likely to save a lot of money in the long run. C) Defects found by the developers are less costly to fix than those found in review or testing. D) Testing the screens near the end of the project will leave little time to incorporate changes.

B

You are the project manager of the PUY Project. This project requires a chemical engineer for seven months of the project, but there are no available chemical engineers within your department. This is an example of which of the following? A) Organizational Interfaces B) Resource Requirement C) Contractor Requirements D) Resource Constraint

B Because the engineer is needed, it's a requirement. If we were actively ready for the engineer and they weren't available, that would be a constraint

What does a benefit-cost ratio of 1.7 mean? A) The costs are greater than the benefits. B) Revenue is 1.7 times the costs. C) Profit is 1.7 times the costs. D) Costs are 1.7 times the profits.

B Greater than 1 (>1): benefits are greater than cost Less than 1 (<1): costs are greater than benefits Equal to 1: costs and benefits are equal

The product owner has added three new changes to the product backlog. The agile project manager has met with the team and they have decided immediately how to implement these new changes, although these changes will be implemented in three iterations from now. The product owner informs the agile project manager that he is not happy about this. What should the agile project manager do? A) Ask the product owner when he would like the changes to be implemented B) Tell the team they should not have committed to doing these changes until they were ready to implement them C) Inform the product owner of the potential risk of each change D) Ask the team members to implement the change in the right way

B One of the core principles of agile is to defer decisions. What this means is to make decisions about potential changes or features until the very last minute.

According to Herzberg's Two-Factor Theory of Motivation, which factor is most likely to motivate someone? A) Personal life B) Professional growth C) Salary D) Relationships at work

B Professional growth is most likely to motivate someone as it is a motivating agent. Salary, relationships ant work, and personal life are important, but these are simply hygiene factors.

If the work of the project will contain 10 iterations and the velocity of the team is currently at 14 points. What is the total size of the project in terms of story points? 1) 110 B) 140 C) 150 D) 180

B Total size of the project will be 10 iterations x 14 points = 140 Points.

Jean is a product owner responsible for the company's line of smart digital music devices. During an afternoon working session, she works with the team to review user stories in preparation for the next sprint. Her intention is to ensure the team knows enough about the stories and how large they are in relation to each other. What activity is Jean performing? A) Sprint planning B) Backlog refinement C) Sprint retrospective D) Daily stand-up

B refining the backlog in order to prepare for the next iteration.

A product is being built iteratively on a new technology platform. When the project manager asks the team members about the quality of the early product increments, they say "They're fine." How can the project manager verify that the new technology is supporting the quality objectives of the project? A) Ask the team to present performance testing results showing the actual vs expected measures. B) Ask the product owner how well the technology is delivering business value C) Present the quality management plan to the team's coach and ask if the technology is supporting the plan. D) Bring in an auditor to assess the quality

C

Carly has recently been hired at an IT consulting firm. Her firm has a PMO office that is very rigid. The PMO assigns project managers to all projects in a firm. Additionally, the PMO is directly responsible for the success of every project, therefore, they can exert control over the projects. What kind of PMO form does Carly's firm demonstrate? A) Portfolio B) Controlling C) Directive D) Supportive

C

Courtney is new to your consulting firm and is asking for your mentorship. She would like to know what your responsibility as a project manager is concerning project artifacts. What will you tell her? A) The project manager is responsible for sending out updated project artifacts to all stakeholders B) The project manager is responsible for updating all project artifacts C) The project manager is responsible for ensuring that project artifacts are accessible to all parties who may need them D) The project manager is responsible for composing all project artifacst

C

Where can the project manager find work package information such as the code of an account identifier, a statement of work, information on the responsible organization, quality requirements, and information on the required resources? Choose the best answer: A) Project Plan B) WBS C) WBS Dictionary D) Project Management Plan

C

You are a project manager for your organization. In your role as the project manager, you are required to cross-train and coach your project team members. Sarah, a project manager in training, wants to know which project documents can stem from templates? What should be your answer? A) Risk Policies B) Organizational Policies C) Scope Management Plans D) Historical Information

C

You are the project manager for a seller, but you are managing another company's project as well. Things have gone well on the project, and the work is nearly complete. There is still a significant amount of funds in the project budget. The buyer's representative approaches you and asks that you complete some optional requirements to use up the remaining budget. You should do which one of the following? A) Negotiate a change in the contract to take on the additional work B) Complete a contract change for the additional work C) Submit proposed change through the contract integrated change control system D) Deny the change because it is not in the original contract

C

Your software development project requires continuity across the project work. Marvin has been a contractor on your project for 1 year. His contract is about to expire. His work is imperative to the project and he has indicated that he would like to continue working with you through the duration of this project. What should you do? A) Let Marvin's contract lapse and hire a new contractor B) Issue a sole source contract with Marvin C) Issue a single source contract with Marvin D) Hire Marvin on as a full-time employee

C

You are the project manager for the MNB Project. You and your project team are about to enter the activity duration estimating process. Which of the following will not be helpful in your meeting? A) Constraint B) Assumption C) Project Charter D) Identified Risk

C Not an input to Estimate Activity Durations (schedule, planning)

Jacob's PMO asks him to provide a report on the cost of conformance for his latest project. Which of the following should he include? A) Inventory costs B) Rework of deliverables C) Quality training D) Scrap

C Quality training is the only cost here that would be included in the cost of conformance. This can be interpreted as a preventative measure to avoid costs in the future. Scrap, inventory costs, rework of deliverables are all costs of non-conformance. These costs are the results of the problems that were encountered in the project.

You are the project manager of the HNN Project and you're working with the project stakeholders, including the project team and the project sponsor, to identify risks within the project. You have identified an opportunity that the organization could take advantage of as an additional revenue stream. As the project manager, what's the best risk response to choose for this risk? A) Exploit B) Enhance C) Escalate D) Shate

C The best response for this positive risk event is to escalate the risk/opportunity. This risk is beyond the boundaries of the project as it is to generate an additional revenue stream for the organization, not the project.

You are the project manager for the Hardware Inventory Project. You have a piece of equipment that was purchased recently for $10,000 and is expected to last five years in production. At the end of the five years, the expected worth of the equipment will be $1000. Using straight-line depreciation, what is the amount that can be written off each year? A) Zero B) $1,000 C) $1,800 D) $,000

C The straight-line depreciation takes the purchase value of the item, minus the salvage price of the item, divided by the number of time periods. In this instance, it would be $10,000 minus $1000, or $9000. The $9000 is divided by five years and equates to $1800 per year.

Chris's PMO is very hands-off. He meets with the PMO when he needs training on certain project management practices or would like to access a template for a project artifact. The PMO does not have any control over the outcomes or success of his project. What kind of PMO does Chris's office have? A) Directive B) Hybrid C) Supportive D) Controlling

C This is a supportive PMO. A supportive PMO provides OPAs and consultation for projects but has a very low level of control over projects. A directive PMO is rigid and is responsible for the success of all projects. A controlling PMO exerts a moderate level of control but is not accountable for the success of projects. Hybrid is not a kind of PMO.

What would a risk be based on the following information: Marty is 60 percent certain that he can get the facility needed for $45,000, which is $7000 less than what was planned for? A) .6, $45,000, $27,000 B) .6, $52,000, $31,200 C) .6, $7,000, $4,200 D) .6, -$7,000, -$4,200

C This is a tricky question as it's dealing with a positive risk of $7,000. Marty is 60 percent certain he can save the project $7000. The $4200 represents the 60 percent certainty of the savings.

The project team has completed the server deployment project. They have tested the server to ensure that it works according to the requirements given to them, and it seems to be functioning correctly. What process group has the team just completed? A) Planning B) Monitoring and Controlling C) Executing D) Closing

C The outputs of all the executed processes combined, including directly executing the process and managing project work, are the project deliverables. The output for planning would be the project management plan. The output for closing would be the final product service or result transition and the final report. The output for monitoring and controlling would be the accepted deliverables and the work performance reports.

What is the AC if the CV is $10,000 and the EV is $97,000?

CV = EV - AC $10,000 = $97,000 - AC $87,000 = AC

What is the cycle time? Team has 18 points of WIP and is working at a velocity of 27 points per iteration.

Cycle time = WIP/Throughput Cycle time = 18/27 Cycle time = 6.6

A resource issue has come up on a construction project. Which of the following is the best way to deal with the problem? A) Go to the team, go to management, go to resource managers B) Go to resource managers, go to management, go to the customer C) Handle it yourself, go to the customer, go to management D) Resolve problems with resources you control, go to resource managers, go to the customer.

D

Management has said to get the project completed two weeks early. What is the best thing to do? A) Consult the project sponsor B) Crash C) Fast Track D) Advise management of the impact of the change

D

Mike is the project manager supervising the work of a software development project. Mike prefers to encourage team members to direct their work and solve problems themselves. He is responsible for the success of the project but mostly ensures that the team is collaborative. He is known to host impactful team building workshops and enable team decision-making. Which management style does Mike adhere to? A) Delegating B) Coaching C) Directing D) Influencing

D

The project manager receives notification that a major item they purchased for a project will be delayed. What is the best thing for the project manager to do? A) Replan the project to accommodate the delay B) Notify the project sponsor C) Let the customer know about it and talk over options D) Meet with the team and identify alternatives

D

You are the project manager for the GHB Project. You have served as a project manager for your organization for the past ten years. Practically all your projects are completed on time and on budget. The project team has worked with you in the past, and they consider you to be an expert project manager. They also like working with you. Given all of this, you likely have what type of power on this project? A) Formal B) Coercive C) Expert D) Referent

D

A small construction project was budgeted for $72,000 over a six-week period. As of today, the project has spent $22,000 of the budget to complete work that originally was expected to cost $24,000. According to the schedule, the project manager should have spent $30,000 by this point. Based on these circumstances, the project could be best described as: A) Over budget B) Not having enough information C) On budget D) Under budget

D AC = $22,000 EV= $24,000 PV= $30,000 CPI = ev/ac CPI = 24000/22000 = 1.09

Which of the following would not warrant the project closure activities? A) A project phase is complete B) A project is terminated C) A project is complete D) A customer has accepted the project's deliverables

D Project closing is not done when a customer accepts the project's deliverables. The customer's acceptance of a project's deliverables is done within project closure, not as a prelude to project closure. Project closure activities should be done when a project is complete, when a phase of a project is complete, or when a project is terminated.

You are the project manager for the YKL Project. This project will affect several lines of business at completion. You have elected to schedule each milestone in the project to end so the work does not affect current business cycles. This is an example of which one of the following? A) Constraint B) Expert Judgement C) WBS Scheduling D) Soft Logic

D Soft logic allows the project manager to make decisions based on conditions outside of the project, best practices, or guidelines.

When is the Sprint progress monitored? How often should the project progress be monitored?

Daily scrum Once per sprint review

EXERCISE ON PAGE 135

EXERCISE ON PAGE 135

EXERCISE ON PAGE 148

EXERCISE ON PAGE 148

EXERCISE ON PAGE 186

EXERCISE ON PAGE 186

A functional manager wants to make a change to the project. What is the first thing a project manager should do?

Evaluate the impact

A stakeholder wants to add scope to the project. You estimate that the change will add two weeks to the project duration What do you do next?

Evaluate the impact

Someone wants to make a change to the project scope. What is the best thing to do first?

Evaluate the impact

A change in scope has been determined to have no effect on the project constraints. What is the best thing to do?

Identify options

Review the Burnup Chart. The team's velocity has averaged 4.6 story points per iteration with 27 points completed. The project scope was increased during iterations 3 and 4 to a total of 48 story points. Management would like the project scope to be completed by iteration 9. What should be the team goal for iteration 7? Click on the diagram showing the next data point in the Work Accepted line. PAGE 16

LOOK AT PAGE 16

Is the present value of $300,000 to be received three years from now, with an expected interest rate of 10 percent, more or less than $300,000?

Less PV = FV (1+r)^n $300,000 (1+.1)^3 PV= $225,394

Would you leave the project with a negative float?

No You would compress the schedule. If schedule compression efforts do not result in zero or positive float, you need to request a change to adjust the baseline.

An organization has a project with an initial budget of $1,000,000. It is half complete and has spent $2,000,000. Should the organization consider that it is already $1,000,000 over budget in determining whether to continue with the project?

No. The money spent is gone. Sunk costs

Does the network diagram change when the end date changes?

Not automatically PM should investigate schedule compression options such as fast tracking and crashing to meet the new date. With approved changes, the PM should change the network diagram.

Critical path and Float Example - Page 210-211 PRACTICE questions on page 212

Page 210 - 211

Decision Tree Analysis Example - Page 299

Page 299

How to distinguish between Planning, Managing and Control functions?

Planning - looking forward in time Managing - Looking back in time at processes and procedures Controlling - Looking back in time at results

There are 2 projects from which to choose: Project A with a payback period of 6 months and Project B with a payback period of 18 months. Which one should the organization select?

Project A Length of time it takes for the org to recover invest before making profit Shorter time is better, but continue to think holistically; could have a higher payback period if other factors outweigh this input

An organization has 2 projects from which to choose: Project A with an Internal Rate of Return (IRR) of 21% and Project B with an IRR of 15%. Which one is a better option?

Project A Project Selection Higher IRR is better bank account; select the project with the highest return

An organization has two projects from which to choose. Project A will take 3 years to complete and has a Net Present Value (NPV) of $45,000. Project B will take 6 years to complete and has a NPV of $85,000. Which one is a better investment?

Project B Project Selection Positive is good. present value of total benefits minus costs over many time periods.

What are some of the most likely project artifacts to be updated as an outcome of the Direct and Manage Project Work process?

Project Management Plan Requirements Documentation Activity List Assumption and Issue Logs Lessons Learned, Stakeholder, and Risk Registers

What is the difference between quality assurance and control quality?

QA is a prevention-driven activity to do the work correctly the first time. Concerned with overall project performance. QC is an inspection-driven activity to keep mistakes out of the customers' hands.

What is the SPI if the CV is $10,000, the SV is -$3,000, and the PV is $100,000?

SPI = EV/PV SV = EV - PV -$3000 = EV - $100,000 EV = $97,000 SPI = $97,000/$100,000 = .97

How is WBS used after planning phase?

Scope-related change requests - help determine if change is within approved scope Impacts of change Controlling scope creep - reinforce what work should be done - scope creep is increasing scope w/o change orders Communications Team orientation - helps new members understand their role

What do you need before you can validate scope?

Verified Deliverables - deliverables verified in Control Quality Scope Baseline - used for comparison Scope Management Plan - plans for gaining formal acceptance of deliverables Requirements Management Plan and Requirements Traceability Matrix - shows customer how they have been validated, comparing requirements to results) Work Performance Data - from Direct and Manage Project Work - help assess how well product deliverable are meeting requirements) Other Project Documents - quality reports, lessons learned Page 184

What 3 things must you consider when change request is submitted?

While you will examine the entire project for the effect a change may bring, you must always consider time, cost, and scope.

Good Earned Value Analysis Example on page 244

page 244