Exam 3: Project Selection and Portfolio Management

A project manager is using the net present value method to make the final decision on which project to undertake.The company has a 12% required rate of return and expects a 3% rate of inflation for the following four years.What is the NPV of a project that has cash flows as shown in the table? Year Cash Flow 0 -\ 250,000 1 \ 50,000 2 \ 60,000 3 \ 70,000 4 \ 80,000

Options models are used to assist in project selection decisions:

What criteria might be employed to prioritize projects in a project portfolio? Choose any example project from recent business news and deduce which criteria were most important to the company in question.

Successful firms use project portfolio planning routinely to:

Describe or define any four important attributes for screening models used to evaluate projects.

What are the advantages and limitations of simple scoring models?

An internal operating issue in project screening and selection is:

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

The most important thing to remember when using project selection models is to be consistent and objective.

Regardless of which selection method a firm uses,it should always:

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

The Analytical Hierarchy Process is used to decide among three projects that we'll call A,B,and C.The total score for project A is .650,for project B is .514,and for project C is .321.Which of the following statements is BEST?

The first step in the Analytical Hierarchy Process:

How does the Analytical Hierarchy Process differ from a simple scoring model? Is it worth the extra effort?

Personnel costs comprise one of the highest sources of project expense.

A project manager is using a simple scoring model to decide which of four projects is best,given the company's limited resources.The criteria,importance weights,and scores for each are shown in the table.Which project should be chosen?

The efficient frontier in project management is the set of portfolio options that offer:

The efficient frontier in a profile model is the set of options that offers a maximum return for a given level of risk or a minimum risk for every level of return.

A simplified scoring model addresses all the weakness of a checklist model for project screening.