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

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40 Multiple choice questions

1. You can determine minimum scores or ____________________ for specific criteria in a weighted scoring model.
A.
Thresholds
B.
Comparison
C.
Threats
D.
Strategic

2. Project portfolio management focuses on ____________________ issues while individual projects often focus on tactical issues.
A.
Portfolios
B.
Strategic
C.
Financial
D.
Thresholds

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

A.
Discount
B.
Factor
C.
False
D.
True

4. A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria.
A.
Strategic
B.
True
C.
False
D.
Threats

5. In practice, organizations usually use a single approach to select projects.

A.
True
B.
Comparison
C.
False
D.
Threats

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6. ____________________ 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.
A.
Strategic
B.
Payback
C.
Financial
D.
Net Present Value

7. ____________________ considerations are often an important aspect of the project selection process, especially during tough economic
times.
A.
Return on Investment
B.
Financial
C.
Payback
D.
Strategic

8. A program for IT ____________________ projects might include purchasing new hardware, software, and networking equipment, or
determining standards for IT.
A.
Strategic
B.
Financial
C.
infrastructure
D.
Comparison

9. Payback occurs in the year when the cumulative benefits minus costs reach zero.
A.
False
B.
True
C.
Strategic
D.
Discount

10. Organizations—both large and small—cannot undertake most of the potential projects identified because of resource
limitations and other constraints.
A.
True
B.
Threats
C.
False
D.
Projects

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11. Grouping related ____________________ into programs helps improve coordination through better communications, planning,
management, and control.
A.
Projects
B.
Strategic
C.
Portfolios
D.
Payback

12. The main goal of programs is to obtain benefits and control not available from managing projects separately.
A.
True
B.
Threats
C.
Factor
D.
False

13. Organizations should only pursue projects that have the best financial value.
A.
Discount
B.
True
C.
Threats
D.
False

14. Organizations have no choice in whether to fund projects that use __________ costs.
A.
True
B.
Comparison
C.
Discount
D.
nondiscretionary

15. Core projects are those that are required to run the business.
A.
Threats
B.
False
C.
Discount
D.
True

16. You can determine a project's ____________________ by finding what discount rate results in an NPV of zero for the project.
A.
internal rate of return
B.
Strategic
C.
Thresholds
D.
nondiscretionary

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17. ___________________ is the result of subtracting the project costs from the benefits and then dividing by the costs.
A.
Financial
B.
Return on Investment
C.
Payback
D.
Net Present Value

18. 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.
A.
Financial
B.
Projects
C.
Portfolios
D.
Economies

19. NPV analysis is a method for making equal ____________________ between cash flow for multiyear projects. Comparison
A.
Thresholds
B.
Threats
C.
Comparison
D.
Factor

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

A.
Threats
B.
Strategic
C.
False
D.
True

21. A SWOT analysis involves the examination of Strengths, Weaknesses, Opportunities, and ____________________.
A.
Threats
B.
Projects
C.
Thresholds
D.
Comparison

22. The core category of projects labeled as ____________________ costs must be funded for a company to stay in business.
A.
Factor
B.
Comparison
C.
Nondiscretionary
D.
internal rate of return

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23. From the viewpoint of NPV only, if Project 2 has a higher NPV than Project 1, Project 1 should be chosen.
A.
True
B.
False
C.
Threats
D.
Factor

24. ____________________ analysis determines how much time will lapse before accrued benefits overtake accrued and continuing costs.
A.
Return on Investment
B.
Payback
C.
Strategic
D.
Financial

25. Organizations need to narrow down the list of potential projects to those projects that will be most beneficial.
A.
True
B.
Strategic
C.
False
D.
nondiscretionary

26. Most crucial projects, such as drug development or major transportation projects, will achieve payback in less than a year.
A.
Strategic
B.
False
C.
Payback
D.
True

27. The required rate of return is the minimum acceptable rate of return on an investment.
A.
Threats
B.
True
C.
False
D.
Factor

28. When using the hierarchical four-stage planning process for selecting projects, you must start at the bottom of the pyramid.
A.
Factor
B.
False
C.
True
D.
Payback

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29. Low- or medium-priority projects that can be finished in less time than high-priority projects should always be completed first.
A.
Payback
B.
True
C.
Factor
D.
False

30. A(n) ____________________ is a group of projects managed in a coordinated way to obtain benefits and control not available from
managing them individually.
A.
Discount
B.
Program
C.
Payback
D.
True

31. ___________________ analysis determines how much time will lapse before accrued benefits overtake accrued and continuing costs.
A.
Return on Investment
B.
Discount
C.
Projects
D.
Payback

32. Projects with higher NPVs are preferred to projects with lower NPVs if all other factors are equal.
A.
Threats
B.
False
C.
Strategic
D.
True

33. An organization should consider only projects with a negative NPV if financial value is a key criterion for project selection.
A.
Program
B.
Threats
C.
True
D.
False

34. It is important for organizations to develop a fair, consistent, and logical process for selecting projects, programs, and
____________________.
A.
Economies
B.
Thresholds
C.
Portfolios
D.
Strategic

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35. ___________________ 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.
A.
Financial
B.
Return on Investment
C.
Net Present Value
D.
Strategic

36. The annual discount ____________________ is a multiplier for each year that is based on the discount rate and year.
A.
True
B.
Threats
C.
Factor
D.
False

37. If you assign weights to criteria based on percentage, the sum of all the criteria's weights must total 100 percent.
A.
True
B.
False
C.
Threats
D.
Strategic

38. 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.
A.
Economies
B.
Strategic
C.
Scorecard
D.
Financial

39. According to Dr. Robert Kaplan and Dr. David Norton, a balanced scorecard rejects most traditional financial measures.
A.
Threats
B.
True
C.
Projects
D.
False

40. A(n) ____________________ rate is the rate used in discounting future cash flows.
A.
Financial
B.
Strategic
C.
Payback
D.
Discount

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