Exam 3: Project Selection and Portfolio Management

A firm that offsets risky ventures with more secure projects or new development ventures with existing product line cash cows is desirous of ________.

What is the time value of money principle and how does it apply to project selection?

The concept of project portfolio management holds that firms should:

A proactive project portfolio:

A project manager is using the payback method to make the final decision on which project to undertake.The company has a 10% required rate of return and expects a 4% rate of inflation for the following five years.What is the discounted payback of a project that has cash flows as shown in the table?

A project selection model that is simple to apply has the virtue of ________.

Among the different types of risk that might be considered during project selection are ________,________ and ________.

A project manager is using the net present value method to make the final decision on which project to undertake.The company has a 10% required rate of return and expects a 4% rate of inflation for the following five years.What is the NPV of a project that has cash flows as shown in the table?

Which statement about the use of the profile model is best?

A project manager is using the net present value method to make the final decision on which project to undertake.The company has a 10% required rate of return and expects a 4% rate of inflation for the following five years.What is the NPV of a project that has cash flows as shown in the table?

What two simple rules should be followed when choosing a project selection approach?

A selection model that is broad enough to be applied to multiple projects has the benefit of:

A project manager is using the payback method to make the final decision on which project to undertake.The company has a 10% required rate of return and expects a 4% rate of inflation for the following five years.What is the non-discounted payback of a project that has cash flows as shown in the table?

The reciprocal of the payback period is used to calculate the average rate of return for a project.

The length of time it takes to recoup the investment in a project is the ________.

Inatech is contemplating two different projects and decides to perform a financial analysis to determine which is more financially lucrative.Project A and B have the cash flows as shown and Inatech uses a required rate of return of 10%.Compute the internal rate of return for both projects to determine which is worth of funding.

________ is the systematic process of selecting,supporting,and managing a firm's collection of projects.

Choose any example from recent news media and explain why their project failed.

A project manager is using the internal rate of return method to make the final decision on which project to undertake.Which of these four projects has the highest internal rate of return?

Inatech is contemplating two different projects and decides to perform a financial analysis to determine which is more financially lucrative.Project A and B have the cash flows as shown and Inatech uses a required rate of return of 10% and an inflation rate of 4%.Compute the payback in years and the net present value for both projects and offer advice as to the best course of action.