9/27/2020 Test: Project Management Chapter 2 | Quizlet

NAME

40 True/False questions

1. The core category of projects labeled as ____________________ costs must be funded for a company to stay in
business. → Nondiscretionary

True

False

2. If you assign weights to criteria based on percentage, the sum of all the criteria's weights must total 100 percent.  → False

True

False

3. An organization should consider only projects with a negative NPV if financial value is a key criterion for project
selection. → True

True

False

4. From the viewpoint of NPV only, if Project 2 has a higher NPV than Project 1, Project 1 should be chosen.  → Factor

True

False

5. You can determine a project's ____________________ by finding what discount rate results in an NPV of zero for the project.  → Return
on Investment

True

False

6. Organizations should only pursue projects that have the best financial value. → False

True

False

7. ___________________ is the result of subtracting the project costs from the benefits and then dividing by the costs.  → Net Present
Value

True

False

8. It is important for organizations to develop a fair, consistent, and logical process for selecting projects, programs, and
____________________. → Strategic

True

False

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9/27/2020 Test: Project Management Chapter 2 | Quizlet

9. Grouping related ____________________ into programs helps improve coordination through better communications, planning,
management, and control. → Portfolios

True

False

10. Payback occurs in the year when the cumulative benefits minus costs reach zero. → False

True

False

11. Low- or medium-priority projects that can be finished in less time than high-priority projects should always be completed
first. → Factor

True

False

12. ____________________ planning involves determining long-term objectives by analyzing the strengths and weaknesses of an
organization, studying opportunities and threats in the business environment, predicting future trends, and projecting the need
for new products and services. → Financial

True

False

13. A construction firm using ____________________ of scale can purchase materials, obtain services, and hire workers for less money if it is
managing the construction of 100 houses instead of just one house. → Scorecard

True

False

14. A program for IT ____________________ projects might include purchasing new hardware, software, and networking equipment, or
determining standards for IT. → infrastructure

True

False

15. In practice, organizations usually use a single approach to select projects. → True

True

False

16. A balanced ____________________ is a methodology that converts an organization's value drivers—such as customer service, innovation,
operational efficiency, and financial performance—to a series of defined metrics. → Economies

True

False

17. Most crucial projects, such as drug development or major transportation projects, will achieve payback in less than a
year. → False

True

False

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9/27/2020 Test: Project Management Chapter 2 | Quizlet

18. A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria.  → False

True

False

19. Projects with higher NPVs are preferred to projects with lower NPVs if all other factors are equal.  → False

True

False

20. Just as projects are unique, so are project portfolios. → True

True

False

21. The main goal of programs is to obtain benefits and control not available from managing projects separately.  → True

True

False

22. Organizations—both large and small—cannot undertake most of the potential projects identified because of resource
limitations and other constraints. → True

True

False

23. A(n) ____________________ rate is the rate used in discounting future cash flows. → Financial

True

False

24. The annual discount ____________________ is a multiplier for each year that is based on the discount rate and year.  → False

True

False

25. ___________________ analysis determines how much time will lapse before accrued benefits overtake accrued and continuing
costs. → Financial

True

False

26. Project portfolio management focuses on ____________________ issues while individual projects often focus on tactical
issues. → Strategic

True

False

27. ____________________ analysis determines how much time will lapse before accrued benefits overtake accrued and continuing
costs. → Strategic

True

False

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28. ____________________ considerations are often an important aspect of the project selection process, especially during tough economic
times. → Financial

True

False

29. When using the hierarchical four-stage planning process for selecting projects, you must start at the bottom of the
pyramid. → Factor

True

False

30. The required rate of return is the minimum acceptable rate of return on an investment. → False

True

False

31. With respect to NPV, all organizations start discounting in Year 0 (immediately).  → True

True

False

32. A SWOT analysis involves the examination of Strengths, Weaknesses, Opportunities, and ____________________.  → Thresholds

True

False

33. Core projects are those that are required to run the business.  → True

True

False

34. You can determine minimum scores or ____________________ for specific criteria in a weighted scoring model. → Thresholds

True

False

35. Organizations have no choice in whether to fund projects that use __________ costs. → nondiscretionary

True

False

36. Organizations need to narrow down the list of potential projects to those projects that will be most beneficial.  → False

True

False

37. ___________________ analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all
expected future cash inflows and outflows to the present point in time. → Net Present Value

True

False

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38. According to Dr. Robert Kaplan and Dr. David Norton, a balanced scorecard rejects most traditional financial measures. → True

True

False

39. A(n) ____________________ is a group of projects managed in a coordinated way to obtain benefits and control not available from
managing them individually. → Program

True

False

40. NPV analysis is a method for making equal ____________________ between cash flow for multiyear projects.
Comparison → Comparison

True

False

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