Question 1

The concept of project portfolio management holds that firms should:

Accepted Answer

A)  Regard all projects as unified assets. 
B)  Manage projects as independent entities. 
C)  Focus on short-term strategic goals. 
D)  Focus on long-term constraints. 
A)  Regard all projects as unified assets. 
B)  Manage projects as independent entities. 
C)  Focus on short-term strategic goals. 
D)  Focus on long-term constraints.

Question 2

Which of these statements about valuation models is NOT correct?

Accepted Answer

A)  NPV employs a weighted average cost of capital discount rate that reflects potential reinvestment. 
B)  IRR and NPV calculations typically make the same investment recommendations only when the projects are independent of each other. 
C)  If cash flows are not normal, IRR may arrive at multiple solutions. 
D)  IRR is a more robust determinant of project viability than NPV. 
A)  NPV employs a weighted average cost of capital discount rate that reflects potential reinvestment. 
B)  IRR and NPV calculations typically make the same investment recommendations only when the projects are independent of each other. 
C)  If cash flows are not normal, IRR may arrive at multiple solutions. 
D)  IRR is a more robust determinant of project viability than NPV.

Question 3

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.

Accepted Answer

@#IMG-DLM& The NPV for project A is $256,764 and t

Question 4

Souder's model selection criterion that encourages ease of adaptation to changes in tax laws, building codes, among others, is called:

Accepted Answer

A)  Ease of use. 
B)  Cost. 
C)  Capability. 
D)  Flexibility. 
A)  Ease of use. 
B)  Cost. 
C)  Capability. 
D)  Flexibility.

Question 5

Rank the problems in implementing portfolio management from largest to smallest and justify your rankings.

Accepted Answer

Recent research seems to suggest that th

Question 6

A company facing an interest rate of 8% must choose among projects offering the following four-year cash flows. If the company is employing the net present value criterion, which project should they choose?

Accepted Answer

A)  $25,000 in year 1; $15,000 in year 2; $10,000 in year 3; and $5,000 in year 4 
B)  $5,000 in year 1; $5,000 in year 2; $20,000 in year 3; and $30,000 in year 4 
C)  $15,000 in year 1; $15,000 in year 2; $15,000 in year 3; and $15,000 in year 4 
D)  $5,000 in year 1; $5,000 in year 2; $25,000 in year 3; and $25,000 in year 4 
A)  $25,000 in year 1; $15,000 in year 2; $10,000 in year 3; and $5,000 in year 4 
B)  $5,000 in year 1; $5,000 in year 2; $20,000 in year 3; and $30,000 in year 4 
C)  $15,000 in year 1; $15,000 in year 2; $15,000 in year 3; and $15,000 in year 4 
D)  $5,000 in year 1; $5,000 in year 2; $25,000 in year 3; and $25,000 in year 4

Question 7

A commercial factor in project selection and screening might be:

Accepted Answer

A)  A need to develop employees. 
B)  The likelihood that users of the project are injured. 
C)  The long-term market dominance. 
D)  The impact on the company's image. 
A)  A need to develop employees. 
B)  The likelihood that users of the project are injured. 
C)  The long-term market dominance. 
D)  The impact on the company's image.

Question 8

A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years. What is the NPV of a project that has cash flows as shown in the table?

Accepted Answer

A)  $4.955 
B)  $42,586 
C)  -$23,667 
D)  -$122,569 
A)  $4.955 
B)  $42,586 
C)  -$23,667 
D)  -$122,569

Question 9

What are three keys to success for project portfolio management? Which is most important?

Accepted Answer

The author indicates that the keys to su

Question 10

Describe any four types of risk that projects may hold.

Accepted Answer

Risk factors reflect elements of unpredi

Question 11

Successful project management firms rely on home runs and narrowly concentrated efforts since specialization creates name recognition and market share.

Accepted Answer

A) True 
 B)False

Question 12

Your university is considering two projects to increase enrollment: offering traditional classes from midnight to 6 a.m. or offering house call classes where the professor would visit your home to provide instruction. Use a simple scoring model with at least three criteria to evaluate these two potential projects and indicate which project should be chosen.

Accepted Answer

Answers may vary widely. A simplified sc

Question 13

Multiple project environments thrive on:

Accepted Answer

A)  Multi-layered bureaucracy. 
B)  Rigid development processes. 
C)  Narrow communication channels. 
D)  Improvisation by project teams. 
A)  Multi-layered bureaucracy. 
B)  Rigid development processes. 
C)  Narrow communication channels. 
D)  Improvisation by project teams.

Question 14

The checklist model of project screening has a mechanism to accommodate the differential importance of relevant criteria.

Accepted Answer

A) True 
 B)False

Question 15

One project factor that directly impacts a firm's internal operations is the:

Accepted Answer

A)  Expected return on investment. 
B)  Financial risk. 
C)  Need to develop employees. 
D)  Impact on company's image. 
A)  Expected return on investment. 
B)  Financial risk. 
C)  Need to develop employees. 
D)  Impact on company's image.

Question 16

The simple scoring model has this advantage over a checklist model for screening projects.

Accepted Answer

A)  Scaling from 1 to 5 is extremely accurate. 
B)  Scaling models ensure a reasonable link between the selected and weighted criteria and the business objectives that motivated their selection. 
C)  Scaling models allow decision makers to treat one criterion as more important than another. 
D)  Scaling models have been proven to make correct decisions better than 95% of the time while checklists only achieve 80% accuracy. 
A)  Scaling from 1 to 5 is extremely accurate. 
B)  Scaling models ensure a reasonable link between the selected and weighted criteria and the business objectives that motivated their selection. 
C)  Scaling models allow decision makers to treat one criterion as more important than another. 
D)  Scaling models have been proven to make correct decisions better than 95% of the time while checklists only achieve 80% accuracy.

Question 17

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 four years. What is the non-discounted payback of a project that has cash flows as shown in the table?

Accepted Answer

A)  3.875 years 
B)  3.625 years 
C)  3.750 years 
D)  3.500 years 
A)  3.875 years 
B)  3.625 years 
C)  3.750 years 
D)  3.500 years

Question 18

Describe the use of a profile model and sketch an example, clearly labeling every component and the best alternative in your example.

Accepted Answer

Profile models allow managers to plot ri

Question 19

A principal cause of portfolio underperformance is:

Accepted Answer

A)  Conservative technical communities. 
B)  Government intervention. 
C)  Out-of-sync projects. 
D)  Scarce resources. 
A)  Conservative technical communities. 
B)  Government intervention. 
C)  Out-of-sync projects. 
D)  Scarce resources.

The concept of project portfolio management holds that firms should:

Which of these statements about valuation models is NOT correct?

Souder's model selection criterion that encourages ease of adaptation to changes in tax laws, building codes, among others, is called:

Rank the problems in implementing portfolio management from largest to smallest and justify your rankings.

A company facing an interest rate of 8% must choose among projects offering the following four-year cash flows. If the company is employing the net present value criterion, which project should they choose?

A commercial factor in project selection and screening might be:

A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years. What is the NPV of a project that has cash flows as shown in the table?

What are three keys to success for project portfolio management? Which is most important?

Describe any four types of risk that projects may hold.

Successful project management firms rely on home runs and narrowly concentrated efforts since specialization creates name recognition and market share.

Multiple project environments thrive on:

The checklist model of project screening has a mechanism to accommodate the differential importance of relevant criteria.

One project factor that directly impacts a firm's internal operations is the:

The simple scoring model has this advantage over a checklist model for screening projects.

Describe the use of a profile model and sketch an example, clearly labeling every component and the best alternative in your example.

A principal cause of portfolio underperformance is:

Introduction: Why Project Management

The Organizational Context: Strategy, Structure, and Culture

Leadership and the Project Manager

Scope Management

Project Team Building, Conflict, and Negotiation

Risk Management

Cost Estimation and Budgeting

Project Scheduling: Networks, Duration Estimation, and Critical Path

Project Scheduling: Lagging, Crashing, and Activity Networks

Advanced Topics in Planning and Scheduling: Agile and Critical Chain

Resource Management

Project Evaluation and Control

Project Closeout and Termination

Filters

Exam 3: Project Selection and Portfolio Management

The concept of project portfolio management holds that firms should:

Which of these statements about valuation models is NOT correct?

Souder's model selection criterion that encourages ease of adaptation to changes in tax laws, building codes, among others, is called:

Rank the problems in implementing portfolio management from largest to smallest and justify your rankings.

A company facing an interest rate of 8% must choose among projects offering the following four-year cash flows. If the company is employing the net present value criterion, which project should they choose?

A commercial factor in project selection and screening might be:

A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years. What is the NPV of a project that has cash flows as shown in the table?

What are three keys to success for project portfolio management? Which is most important?

Describe any four types of risk that projects may hold.

Successful project management firms rely on home runs and narrowly concentrated efforts since specialization creates name recognition and market share.

Multiple project environments thrive on:

The checklist model of project screening has a mechanism to accommodate the differential importance of relevant criteria.

One project factor that directly impacts a firm's internal operations is the:

The simple scoring model has this advantage over a checklist model for screening projects.

Describe the use of a profile model and sketch an example, clearly labeling every component and the best alternative in your example.

A principal cause of portfolio underperformance is:

Introduction: Why Project Management

The Organizational Context: Strategy, Structure, and Culture

Leadership and the Project Manager

Scope Management

Project Team Building, Conflict, and Negotiation

Risk Management

Cost Estimation and Budgeting

Project Scheduling: Networks, Duration Estimation, and Critical Path

Project Scheduling: Lagging, Crashing, and Activity Networks

Advanced Topics in Planning and Scheduling: Agile and Critical Chain

Resource Management

Project Evaluation and Control

Project Closeout and Termination

Filters