Quiz on Numeric Models for Project Evaluation

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Questions and Answers

According to the text, what is the purpose of the Project Portfolio Process?

To establish a project council
To balance short-, medium-, and long-term returns (correct)
To eliminate projects that incur excessive risk and/or cost
To identify co-dependent projects

What is the first step in the Project Portfolio Process?

Reduce the project and criteria set
Collect project data
Identify project categories and criteria
Establish a project council (correct)

According to the text, who are the members of the project council?

The head of the Project Management Office
The project managers of major projects
Particularly relevant general managers
Senior management (correct)

What are the four separate categories of projects identified in the Project Portfolio Process?

Platform projects (C) Signup and view all the answers

Which of the following is NOT a problem with having multiple projects?

Projects are closely tied to goals and strategy (C) Signup and view all the answers

What does project management maturity refer to?

The mastery of skills required to manage projects competently (B) Signup and view all the answers

What determines an organization's success according to the text?

The portfolio of projects (A) Signup and view all the answers

What is one challenge mentioned in the text regarding multiple projects?

Handling the growing number of projects (D) Signup and view all the answers

Which model assumes all criteria are of equal importance?

Unweighted 0–1 factor model (B) Signup and view all the answers

What is a major disadvantage of the unweighted 0–1 factor model?

It assumes all criteria are of equal importance (D) Signup and view all the answers

What is the main advantage of the weighted factor model?

It allows important factors to stand out (D) Signup and view all the answers

What is the purpose of the project portfolio process?

To limit the number of projects being managed so the important projects get the needed resources and attention (B) Signup and view all the answers

Which one of these is a characteristic of a project management maturity level that is considered 'Managed'?

Systems are installed and used to manage and control projects, and the project success rate is high (A) Signup and view all the answers

Which one of these is a characteristic of a project management maturity level that is considered 'Optimizing'?

Has integrated databases that contain historical information to allow continued improvement of the project management system (C) Signup and view all the answers

What is the purpose of project selection?

To evaluate proposed projects and choose to implement some of them in order to achieve the objectives of the parent organization (A) Signup and view all the answers

Which one of these is a characteristic of a non-numeric project selection model?

Justifications for projects that are suggested by top management (D) Signup and view all the answers

Which method of numeric models for project evaluation takes into account the time value of money?

Discounted cash flow (B) Signup and view all the answers

Which formula is used to calculate the Net Present Value (NPV) of a project?

$NPV(project) = A0 + \sum_{t=1}^{n} \frac{Ft},{(1+k)^t}$ (A) Signup and view all the answers

What does the Internal Rate of Return (IRR) represent in numeric models for project evaluation?

The discount rate that causes the NPV to be equal to zero (D) Signup and view all the answers

What are the advantages of Profitability Models in project evaluation?

All of the above (D) Signup and view all the answers

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