project

Topics: Internal rate of return, Net present value, Project management Pages: 26 (6717 words) Published: October 13, 2014
Project Management, 2e (Pinto)
Chapter 3 Project Selection and Portfolio Management

3.1 True/False

1) Numeric project selection models, by their very nature, employ objective values. Answer: FALSE
Diff: 2
Section: 3.1 Project Selection
Skill: Definition
AACSB Tag: Reflective

2) Every decision model contains both objective and subjective factors. Answer: TRUE
Diff: 3
Section: 3.1 Project Selection
Skill: Factual
AACSB Tag: Reflective

3) A simplified scoring model addresses all the weakness of a checklist model for project screening. Answer: TRUE
Diff: 1
Section: 3.2 Approaches to Project Screening and Selection
Skill: Conceptual
AACSB Tag: Reflective

4) The Analytical Hierarchy Process elegantly addresses scaling issues in criteria and negative utility in alternative scores. Answer: FALSE
Diff: 1
Section: 3.2 Approaches to Project Screening and Selection
Skill: Conceptual
AACSB Tag: Analytic Skills

5) The efficient frontier in a profile model is the set of options that offers a maximum return for a given level of risk or a minimum risk for every level of return. Answer: TRUE
Diff: 2
Section: 3.2 Approaches to Project Screening and Selection
Skill: Factual
AACSB Tag: Analytic Skills

6) The present value of money is lower the further out in the future I expect to spend it. Answer: FALSE
Diff: 2
Section: 3.3 Financial Models
Skill: Analytical
AACSB Tag: Analytic Skills
7) The reciprocal of the payback period is used to calculate the average rate of return for a project. Answer: TRUE
Diff: 2
Section: 3.3 Financial Models
Skill: Analytical
AACSB Tag: Analytic Skills

8) Internal rate of return is preferable to net present value because IRR employs a weighted average cost of capital discount rate that reflects potential reinvestment. Answer: FALSE
Diff: 3
Section: 3.3 Financial Models
Skill: Conceptual
AACSB Tag: Analytic Skills

9) An options model could be used when financial criteria would change significantly over time. Answer: TRUE
Diff: 2
Section: 3.3 Financial Models
Skill: Conceptual
AACSB Tag: Reflective

10) The most important thing to remember when using project selection models is to be consistent and objective. Answer: TRUE
Diff: 1
Section: 3.3 Financial Models
Skill: Conceptual
AACSB Tag: Reflective

11) Because projects managed under a project portfolio management scheme may be independent of each other, it is not necessary to consider resource use when deciding to pursue any single project. Answer: FALSE

Diff: 1
Section: 3.4 Project Portfolio Management
Skill: Conceptual
AACSB Tag: Reflective

12) A balanced project portfolio may be interpreted to mean that a single portfolio contains both high and low risk, low growth and high growth, and risky and safe projects. Answer: FALSE
Diff: 2
Section: 3.4 Project Portfolio Management
Skill: Factual
AACSB Tag: Reflective

13) Successful project management firms rely on home runs and narrowly concentrated efforts since specialization creates name recognition and market share. Answer: FALSE
Diff: 1
Section: 3.4 Project Portfolio Management
Skill: Conceptual
AACSB Tag: Reflective
14) Personnel costs comprise one of the highest sources of project expense. Answer: TRUE
Diff: 1
Section: 3.4 Project Portfolio Management
Skill: Factual
AACSB Tag: Reflective

15) If strategy and portfolio are not in sync, the firm is poised on the cusp of success. Answer: FALSE
Diff: 1
Section: 3.4 Project Portfolio Management
Skill: Conceptual
AACSB Tag: Reflective

3.2 Fill in the Blank

1) A project selection model that is broad enough to be applied to multiple projects has the virtue of __________. Answer: comparability
Diff: 2
Section: 3.1 Project Selection
Skill: Definition
AACSB Tag: Reflective

2) Project selection model come in two general classes: __________ and __________. Answer: numeric, nonnumeric
Diff: 2...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Project Proposal-Ford Motor Company Essay
  • Project management Essay
  • Two New Software Projects Are Proposed To A Young Engineer Without Answer Essay
  • Project Techniques and Risk Management Essay
  • Project Management Exam 1 Essay
  • Project Management Mid-Term Study Guide Essay
  • Project Plan Overview Paper
  • IT Project Management: Question Paper

Become a StudyMode Member

Sign Up - It's Free