Review Questions

PM Milestone Project Management Templates

PM Milestone Project Management Templates

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1. When a project is being performed under contract, the SOW is provided by which of the following?

A. The buyer

B. The project sponsor

C. The project manager

D. The contractor

2. You've been hired as a manager for the adjustments department of a nationwide bank based in your city. The adjustments department is responsible for making corrections to customer accounts. This is a large department, with several smaller sections that deal with specific accounts, such as personal checking or commercial checking. You've received your first set of management reports and can't make heads or tails of the information. Each section appears to use a different methodology to audit their work and record the data for the management report. You request that a project manager from the PMO comes down and get started right away on a project to streamline this process and make the data and reports consistent. This project came about as a result of which of the following?

A. Technological advance

B. Organizational need

C. Customer request

D. Legal requirement

3. What are the inputs to the Develop Project Charter process?

A. Contract, project SOW, business case, enterprise environmental factors, and organizational process assets

B. Project SOW, business case, and organizational process assets

C. Contract, enterprise environmental factors, and organizational process assets

D. Project SOW, enterprise environmental factors, and organizational process assets

4. You work for a large manufacturing plant. Your firm is thinking of initiating a new project to release an overseas product line. This is the company's first experience in the overseas market, and it wants to make a big splash with the introduction of this product. The project entails producing your product in a concentrated formula and packaging it in smaller containers than the U.S. product uses. A new machine is needed in order to mix the first set of ingredients in the concentrated formula. Which of the following actions is the next best step the project manager should take?

A. The project manager should document the project's high-level requirements in a project charter document and recommend that the project proceed.

B. The project manager knows the project is a go and should document the description of the product in the statement of work.

C. The project manager should document the business need for the project and recommend that a feasibility study be performed to determine the viability of the project.

D. The project manager should document the key stakeholders and their potential impacts in the stakeholder register.

5. You are the project manager for Fun Days Vacation Resorts. Your new project assignment is to head up the Fun Days resort opening in Austin, Texas. You are estimating the duration of the project plan activities, devising the project schedule, and monitoring and controlling deviations from the schedule. Which of the Project Management Knowledge Areas are you working in?

A. Project Scope Management

B. Project Quality Management

C. Project Integration Management

D. Project Time Management

6. According to the PMBOKĀ® Guide, the project statement of work should contain or reference which of the following elements?

A. Strategic plan, product scope description, measurable project objectives, and business need

B. Business need, strategic plan, product scope description

C. Project purpose, measurable project objectives, business case, and product scope description

D. Product scope description, project purpose, and business need

7. Your nonprofit organization is preparing to host its first annual 5K run/walk in City Park. You worked on a similar project for the organization two years ago when it cohosted the 10K run through Overland Pass. Which of the organizational process assets might be most helpful to you on your new project?

A. The organization's marketing plans

B. Historical information from a pervious 10K run or similar project

C. The marketplace and political conditions

D. The organization's project management information systems

8. Which of the following lists of processes belong to The Project Integration Management Knowledge Area?

A. Define Scope, Close Procurements, and Perform Integrated Change Control

B. Develop Project Management Plan, Direct and Manage Project Execution, and Perform Integrated Change Control

C. Define Scope, Direct and Manage Project Execution, and Manage Stakeholders Expectations

D. Define Scope, Collect Requirements, and Close Project or Phase

9. Comparative methods, scoring methods, and economic and cash flow analysis are all part of which of the following?

A. Benefit measurement methods

B. Constrained optimization methods

C. Benefit measurement methods, which are a component of a tool and technique of the Develop Project Charter process

D. Constrained optimization methods, which are a component of a tool and technique of the Develop Project Charter process

10. You are the project manager for the Late Night Smooth Jazz Club chain, with stores in 12 states. Smooth Jazz is considering opening a new club in Arizona or Nevada. You have derived the following information:

Project Arizona: The payback period is 18 months, and the NPV is (250).

Project Nevada: The payback period is 24 months, and the NPV is 300.

Which project would you recommend to the selection committee?

A. Project Arizona, because the payback period is shorter than the payback period for Project Nevada

B. Project Nevada, because its NPV is a positive number

C. Project Arizona, because its NPV is a negative number

D. Project Nevada, because its NPV is a higher number than Project Arizona's NPV

11. You are the project manager for the Late Night Smooth Jazz Club chain, with stores in 12 states. Smooth Jazz is considering opening a new club in Kansas City or Spokane. You have derived the following information:

Project Kansas City: The payback period is 27 months, and the IRR is 6 percent.

Project Spokane: The payback period is 25 months, and the IRR is 5 percent.

Which project should you recommend to the selection committee?

A. Project Spokane, because the payback period is the shortest

B. Project Kansas City, because the IRR is the highest

C. Project Spokane, because the IRR is the lowest

D. Project Kansas City, because the payback period is the longest

12. Which of the following is true regarding NPV?

A. NPV assumes reinvestment at the cost of capital.

B. NPV decisions should be made based on the highest value for all the selections.

C. NPV assumes reinvestment at the prevailing rate.

D. NPV assumes reinvestment at the NPV rate.

13. You are the project manager for Insomniacs International. Since you don't sleep much, you get a lot of project work done. You're considering recommending a project that costs $575,000; expected inflows are $25,000 per quarter for the first two years and then $75,000 per quarter thereafter. What is the payback period?

A. 40 months

B. 38 months

C. 39 months

D. 41 months

14. Which of the following is true regarding IRR?

A. IRR assumes reinvestment at the cost of capital.

B. IRR is not difficult to calculate.

C. IRR is a constrained optimization method.

D. IRR is the discount rate when NPV is equal to zero.

15. Mathematical models using linear, dynamic, integer, or algorithm models are considered

A. project selection criteria

B. a form of expert judgment

C. project selection methods

D. a form of historical information

16. Your project selection committee used a weighted scoring model and found that Project B, with a score of 54, should be chosen over the other competing projects. Which of the following is true?

A. Weighted scoring models are benefit measurement methods.

B. Weighted scoring models are constrained optimization methods.

C. Weighted scoring models are benefit measurement methods and are the least efficient method of project selection.

D. Weighted scoring models are a type of mathematical model that can be used for both project selection and vendor selection.

17. Your selection committee is debating between two projects. Project A has a payback period of 18 months. Project B has a cost of $125,000, with expected cash inflows of $50,000 the first year and $25,000 per quarter after that. Which project should you recommend?

A. Either Project A or Project B, because the payback periods are equal

B. Project A, because Project B's payback period is 21 months

C. Project A, because Project B's payback period is 24 months

D. Project A, because Project B's payback period is 20 months

18. Which of the following is true?

A. Discounted cash flow analysis is the least precise of the cash flow techniques because it does not consider the time value of money.

B. NPV is the least precise of the cash flow analysis techniques because it assumes reinvestment at the discount rate.

C. Payback period is the least precise of the cash flow analysis techniques because it does not consider the time value of money.

D. IRR is the least precise of the cash flow analysis techniques because it assumes reinvestment at the cost of capital.

19. You are a project manager for Zippy Tees. Your selection committee has just chosen a project you recommended for implementation. Your project is to manufacture a line of miniature stuffed bears that will be attached to your company's trendy T-shirts. The bears will be wearing the same T-shirt design as the shirt to which they're attached. Your project sponsor thinks you've really impressed the big boss and wants you to skip to the manufacturing process right away. What is your response?

A. Agree with the project sponsor because that person is your boss and has a lot of authority and power in the company.

B. Require that a preliminary budget be established and a resource list be put together to alert other managers of the requirements of this project. This should be published and signed by the other managers who are impacted by this project.

C. Require that a project charter be written and signed off on by all stakeholders before proceeding.

D. Suggest that a preliminary statement of work be written to outline the objectives of the project.

20. Which of the following is true regarding the project charter?

A. The project charter should be published under the name of a manager external to the project.

B. The project charter should be published under a key stakeholder's name.

C. The project charter should be published under the name of the project manager.

D. The project charter should be published under the name of the project champion.

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Project Management Made Easy

Project Management Made Easy

What you need to know aboutā€¦ Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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