Question 1

The simplest method of project screening and selection is developing a list of criteria that pertain to the choice of projects and then applying them to alternatives.

Accepted Answer

A) True 
 B)False

Question 2

Which statement about the Analytical Hierarchy Process is FALSE?

Accepted Answer

A)  AHP scores are significant. 
B)  AHP can be used to capture choice options that do not yield positive outcomes. 
C)  AHP can improve the process of developing project proposals. 
D)  AHP groups subcriteria that share the weight of a common higher-level criterion.

Question 3

Souder's project screening criterion that indicates an effective model must reflect organization objectives,including a firm's strategic goals and mission is called:

Accepted Answer

A)  Realism. 
B)  Capability. 
C)  Comparability. 
D)  Ease of use.

Question 4

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? $$\begin{array} { | l | l | } 
\hline \text { Year } & \text { Cash Flow } \
\hline 0 & - \$ 350,000 \
\hline 1 & \$ 50,000 \
\hline 2 & \$ 80,000 \
\hline 3 & \$ 100,000 \
\hline 4 & \$ 150,000 \
\hline
\end{array}$$

Accepted Answer

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

Question 5

Every decision model contains both objective and subjective factors.

Accepted Answer

A) True 
 B)False

Question 6

Which statement regarding project selection and screening criteria is BEST?

Accepted Answer

A)  The most complete model in the world is still only a partial reflection of organization reality. 
B)  It is possible, given enough time and effort, to identify all relevant issues that play a role in project selection. 
C)  Decision models are either objective or subjective. 
D)  For many projects, more than 80% of the decision criteria are vital.

Question 7

If a model can be applied successfully by people in all areas and levels of an organization,it is said to possess the trait of:

Accepted Answer

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

Question 8

A simple scoring model is used to decide among three projects that we'll call A,B,and C.The total score for project A is 30,for project B is 20,and for project C is 10.Which of the following statements is BEST?

Accepted Answer

A)  If project A is successfully completed, it will yield three times the benefits that project C would have provided. 
B)  If project C is chosen, the company would benefit only half as much as if they had chosen project B. 
C)  Project C is better than project B for this company at this point in time. 
D)  Project A is better than project B for this company at this point in time.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Describe any four types of risk that projects may hold.

Accepted Answer

The answer of Describe any four types of risk that...

Question 11

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

Accepted Answer

A)  The profile model requires careful calculation of the percentage risk for each possible project. 
B)  The scale used for the profile model can be any two numerical variables that a company deems important. 
C)  The efficient frontier in the profile model is where return is 100% (or greater) and risk is 0%. 
D)  For a given level of risk, a positive move on the return axes would indicate a superior project.

Question 12

The Analytic Hierarchy Process is being employed in a project selection decision.One major criteria,cost,receives a weighting value of 40%,which is split into short term (50%),intermediate term (30%),and long term (20%).Which of these statements is BEST?

Accepted Answer

A)  Short term, intermediate term, and long term must receive overall weightings that total 100%. 
B)  There must be at least one other major criteria that has 40% weighting. 
C)  Intermediate-term cost receives a weighting of 12%. 
D)  Long-term cost receives an overall weighting of 80%.

Question 13

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?

Accepted Answer

A)  $25,000 initial outlay with $10,000 cash inflows during the following five years 
B)  $12,500 initial outlay with $10,000 cash inflows during the following five years 
C)  $25,000 initial outlay with $5,000 cash inflows during the following five years 
D)  $12,500 initial outlay with $5,000 cash inflows during the following five years

Question 14

Souder's project screening criterion of realism addresses the question:

Accepted Answer

A)  How many workers will the project need? 
B)  Will the project work as intended? 
C)  Who are the stakeholders? 
D)  How often should the project team meet?

Question 15

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

Accepted Answer

The answer of Describe the use of a profile model...

Question 16

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 17

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

Accepted Answer

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

Question 18

Which statement regarding project selection is BEST?

Accepted Answer

A)  Organizational reality can be perfectly captured by most decision-making models. 
B)  Before selecting any project, the team should identify all the relevant issues that play a role in project selection. 
C)  Decision models must contain either objective or subjective factors. 
D)  Every decision model has both objective and subjective factors.

Question 19

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?

Accepted Answer

A)  Project Greenlight 
B)  Project Runway 
C)  Project X 
D)  Project Ilevomit

Question 20

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.

Exam 3: Project Selection and Portfolio Management

The simplest method of project screening and selection is developing a list of criteria that pertain to the choice of projects and then applying them to alternatives.

Which statement about the Analytical Hierarchy Process is FALSE?

Souder's project screening criterion that indicates an effective model must reflect organization objectives,including a firm's strategic goals and mission is called:

Every decision model contains both objective and subjective factors.

Which statement regarding project selection and screening criteria is BEST?

If a model can be applied successfully by people in all areas and levels of an organization,it is said to possess the trait of:

A simple scoring model is used to decide among three projects that we'll call A,B,and C.The total score for project A is 30,for project B is 20,and for project C is 10.Which of the following statements is BEST?

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

Describe any four types of risk that projects may hold.

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

The Analytic Hierarchy Process is being employed in a project selection decision.One major criteria,cost,receives a weighting value of 40%,which is split into short term (50%) ,intermediate term (30%) ,and long term (20%) .Which of these statements is BEST?

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?

Souder's project screening criterion of realism addresses the question:

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

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

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

Which statement regarding project selection is BEST?

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