Exam 2: Strategic Management and Project Selection

In a project portfolio, __________ projects have objectives or deliverables that are only incrementally different in both product and process from existing offerings.

Scoring models are most often used to overcome this disadvantage of profitability models.

If a system is being updated due to operating necessity, the project was selected because__________.

The underlying premise of the real options approach is that __________.

The drawback of the __________ model is that it fails to consider cash flows obtained once the initial investment has been recovered.

The __________is the value of an opportunity foregone.

Firms usually have two or more projects and this collection of projects is referred to as __________.

A formalized method for transforming the opinions of a group of individuals into quantitative measures that can be aggregated for use in decision-making is referred to as the __________.

The two basic types of project selection models identified in the text are ________.

Consider the following three-year projects A and B each with the same initial investment of $1000. You are presented with the following measures for the projects: Project A: NPV $400; Payback 24 months Project B: NPV $545; Payback 26 months Which project would you choose and why?

Explain the difference between risk and uncertainty.

The process of "carving away the unwanted reality from the bones of a problem" is called __________.

Which of the following is NOT an advantage that favors the use of weighted scoring models?

In a project portfolio process, the main purpose of the __________ is to establish and articulate a strategic direction for those projects spanning the internal or external boundaries of the organization.

If the NPV for a project is < 0, it indicates that the project will __________.

Suppose that you have been assigned as the project manager to execute a project that was selected using the sacred cow method of project selection. The project sponsor is an executive who has been with the company for three years. Based on past employment history, the average tenure of a senior executive at your company is 5 years. After reviewing the project's expectations and requirements, the project team has determined that the payback period will be 3.5 years. What are the implications for you and the project team?

Financial forecasts are reported as __________ financial statements.

In a project portfolio, a project that involves a new technology or even a disruptive technology that is known to the industry would serve as an example of a __________ project.

Explain why it is necessary for the project manager to understand the reasons leading to the selection of a project.

The discounted cash flow method determines the net present value of all cash flows by discounting them by the __________.