Question 1

Given discounted benefits of $516,000 and discounted costs of $243,200,your ROI is ____ %.
A) 10
B) 89
C) 112
D) 212

Accepted Answer

ROI (Return on Investment) is calculated by dividing the discounted benefits by the discounted costs and multiplying the result by 100.

ROI = (Discounted Benefits / Discounted Costs) x 100

Substituting the given values,

ROI = (516,000 / 243,200) x 100
ROI = 2.12 x 100
ROI = 212%

Therefore, the answer is (C) 112.

Question 2

After assigning weights for the criteria and scores for each project,you calculate a weighted score for each project by multiplying the weight for each criterion by its score and ____ the resulting values.
A) multiplying
B) adding
C) dividing
D) subtracting

Accepted Answer

To calculate the weighted score for each project, we need to multiply the weight for each criterion by its score and add the resulting values. This will give us the final score for each project, which takes into account the importance of each criterion.

Question 3

The SWOT analysis looks at ____.
A) Services, Weaknesses, Opportunities and Threats
B) Strengths, Weaknesses, Objectives and Threats
C) Strengths, Weaknesses, Opportunities and Threads
D) Strengths, Weaknesses, Opportunities and Threats

Accepted Answer

The SWOT analysis looks at the Strengths, Weaknesses, Opportunities, and Threats of a company or organization. Option A is incorrect as it includes Services instead of Opportunities while Option B is incorrect as it includes Objectives instead of Opportunities. Option C is incorrect because it includes Threads instead of Threats.

Question 4

According to the ____ value of money,a dollar today is worth more than a dollar tomorrow.
A) financial
B) time
C) economic
D) discretionary

Accepted Answer

The time value of money states that money available at present is worth more than the same amount in the future due to its potential earning capacity (interest or return on investment) and the risk of inflation. Therefore, a dollar today is worth more than a dollar tomorrow.

Question 5

Three primary methods for determining the projected financial value of projects include net present value analysis,return on investment,and ____ analysis.
A) growth
B) payback
C) environmental impact
D) efficiency

Accepted Answer

The best choice to complete the sentence is B) payback analysis. Payback analysis measures the amount of time it takes for the initial investment in the project to be paid back through the cash inflows generated by the project. It is a simple and easy-to-understand method of evaluating the financial value of a project, and therefore it is commonly used by many organizations. However, it does not take into account the time value of money, unlike methods such as the net present value analysis.

Question 6

Project managers must be sure to check with their organization to find out its guidelines for when discounting starts,what discount rate to use,and what ____ the organization prefers.
A) charts
B) technique
C) format
D) results

Accepted Answer

The correct answer is "format" because the context of the sentence is about organizational guidelines for financial or procedural matters, such as discounting, which implies a preference for how information is presented or structured, hence "format" fits best.

Question 7

Which of the following formulas is used by Excel to calculate NPV?
A) =npv()
B) =npv(range of cash flows)
C) =npv(discount rate, range of cash flows)
D) =npv(discount rate)

Accepted Answer

The NPV function in Excel requires both the discount rate and the range of cash flows as inputs, so the correct formula is =npv(discount rate, range of cash flows). Option A is incomplete, option B is missing the discount rate input, and option D only includes the discount rate input without the range of cash flows.

Question 8

In the four-stage planning process for selecting projects,____ is the last step.
A) project planning
B) resource allocation
C) business area analysis
D) strategic planning

Accepted Answer

The last step in the four-stage planning process for selecting projects is resource allocation. The four stages are: Strategic planning, Business area analysis, Project planning, and Resource allocation. After identifying potential projects and determining their feasibilities, the final step is to allocate the necessary resources to the selected project(s) in order to execute them effectively.

Question 9

One method for selecting projects based on broad organizational needs is to first determine whether they meet three important criteria: need,____,and will.
A) ambition
B) practicality
C) funding
D) vision

Accepted Answer

The three important criteria for selecting projects based on organizational needs are typically need, funding, and will.

Question 10

If you create the weighted scoring model in a spreadsheet,you can enter the data,create and copy formulas,and perform a "____" analysis.
A) scenario
B) query
C) what-if
D) hypothetical

Accepted Answer

A what-if analysis allows you to explore different outcomes by changing input values in a spreadsheet model, which is useful in determining the impact of changing weights or scores in a weighted scoring model.

Question 11

A ____ rate is the rate used in discounting future cash flows.
A) prime
B) markup
C) cash flow
D) discount

Accepted Answer

The discount rate is the rate that is used to determine the present value of future cash flows by discounting them back to their current value. The rate reflects the time value of money and takes into account factors such as inflation, risk, and opportunity cost. The other options do not relate specifically to discounting future cash flows.

Question 12

Projects that address competitive ____ are much more likely to be successful because they will be important to the organization's competitive position.
A) value
B) products
C) tactics
D) strategy

Accepted Answer

Competitive strategy refers to the methods that organizations use to compete in their respective markets. Addressing competitive strategy is crucial for success because it directly affects the organization's competitive position within the industry. Understanding and implementing a strong competitive strategy can help an organization gain a competitive advantage over its rivals, and ultimately lead to success.

Question 13

Projects should first and foremost address business ____.
A) portfolios
B) ventures
C) needs
D) practices

Accepted Answer

Projects are initiated to fulfill specific business needs and objectives. While portfolios, ventures and practices may be related to the project, they are not the primary focus. Therefore, addressing business needs is the best option.

Question 14

An organization should consider only projects with a ____ NPV if financial value is a key criterion for project selection.
A) positive
B) negative
C) zero
D) well-defined

Accepted Answer

NPV, or Net Present Value, is a financial metric used to calculate the difference between the present value of cash inflows and the present value of cash outflows. A positive NPV indicates that a project is expected to generate more cash inflows than outflows, creating value for the organization. Therefore, if financial value is a key criterion for project selection, an organization should consider only projects with a positive NPV.

Question 15

Payback occurs in the year when the cumulative benefits minus costs reach ____.
A) ($1400)
B) ($100)
C) $0
D) $100

Accepted Answer

Payback occurs when the cumulative benefits (inflow) equal the cumulative costs (outflow), hence the answer is $0. Option C is the only one that meets this condition.

Question 16

A(n)____ scoring model is a tool that provides a systematic process for selecting projects based on many criteria.
A) weighted
B) biased
C) variable
D) opportunity

Accepted Answer

A weighted scoring model is commonly used in project management to evaluate and prioritize projects based on multiple criteria. This model applies weights to each criterion according to its relative importance and assigns points to each project based on how well it meets each criterion. The total score for each project reflects its overall suitability for selection. Biased, variable, and opportunity scoring models are not commonly used in project management.

Question 17

____ period is the amount of time it will take to recoup-in the form of net cash inflows-the total dollars invested in a project.
A) Return
B) Payback
C) Accrual
D) Residual

Accepted Answer

Payback period is the time period required to recover the initial investment through net cash inflows. It indicates the time needed to break even on the investment, and it is a widely used capital budgeting technique for evaluating the profitability of projects.

Question 18

You calculate cash ____ by subtracting costs from benefits,or expenses from income.
A) flow
B) statements
C) budgets
D) structure

Accepted Answer

Cash flow is the calculation of the cash generated or used by a business or individual, and is calculated by subtracting costs from benefits, or expenses from income. Cash flow statements show the inflows and outflows of cash during a period of time, while budgets are plans for future spending and income. Structure refers to the overall organization or arrangement of something.

Question 19

A positive NPV means the return from a project exceeds the ____ cost of capital-the return available by investing the capital elsewhere.
A) fixed
B) variable
C) alternative
D) opportunity

Accepted Answer

NPV stands for Net Present Value which measures the present value of all cash inflows and outflows of a project. A positive NPV means that the present value of cash inflows is greater than the present value of cash outflows. Therefore, the return from the project is higher than the opportunity cost of capital - the return that can be earned by investing the same amount of capital in alternative projects or opportunities. Hence, the correct answer is option D - opportunity cost.

Question 20

____ is the result of subtracting the project costs from the benefits and then dividing by the costs.
A) Return on investment
B) Internal Return Rate
C) NPV
D) The payback period

Accepted Answer

The formula for return on investment (ROI) involves subtracting the project costs from the benefits and dividing the difference by the costs. This calculation provides insight into the overall profitability of a project by determining how much money is generated for every dollar invested.

Quiz 2: Project, program, and Portfolio Selection

Given discounted benefits of $516,000 and discounted costs of $243,200,your ROI is ____ %.

After assigning weights for the criteria and scores for each project,you calculate a weighted score for each project by multiplying the weight for each criterion by its score and ____ the resulting values.

The SWOT analysis looks at ____.

According to the ____ value of money,a dollar today is worth more than a dollar tomorrow.

Three primary methods for determining the projected financial value of projects include net present value analysis,return on investment,and ____ analysis.

Project managers must be sure to check with their organization to find out its guidelines for when discounting starts,what discount rate to use,and what ____ the organization prefers.

Which of the following formulas is used by Excel to calculate NPV?

In the four-stage planning process for selecting projects,____ is the last step.

One method for selecting projects based on broad organizational needs is to first determine whether they meet three important criteria: need,____,and will.

If you create the weighted scoring model in a spreadsheet,you can enter the data,create and copy formulas,and perform a "____" analysis.

A ____ rate is the rate used in discounting future cash flows.

Projects that address competitive ____ are much more likely to be successful because they will be important to the organization's competitive position.

Projects should first and foremost address business ____.

An organization should consider only projects with a ____ NPV if financial value is a key criterion for project selection.

Payback occurs in the year when the cumulative benefits minus costs reach ____.

A(n) ____ scoring model is a tool that provides a systematic process for selecting projects based on many criteria.

____ period is the amount of time it will take to recoup-in the form of net cash inflows-the total dollars invested in a project.

You calculate cash ____ by subtracting costs from benefits,or expenses from income.

A positive NPV means the return from a project exceeds the ____ cost of capital-the return available by investing the capital elsewhere.

____ is the result of subtracting the project costs from the benefits and then dividing by the costs.