Deck 2: Project, program, and Portfolio Selection

Question 1

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

Answer 1

False

Question 2

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

Answer 2

False

Question 3

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

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

Question 7

Money earned today is worth more than money earned in the future,primarily due to inflation.

Question 8

Some core projects can be high risk,have high value,and require good timing.

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

Organizations-both large and small-cannot undertake most of the potential projects identified because of resource limitations and other constraints.

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

Just as projects are unique,so are project portfolios.

Question 21

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

A) 10
B) 89
C) 112
D) 212

Question 22

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

Question 23

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

Question 24

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

A) financial
B) time
C) economic
D) discretionary

Question 25

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

Question 26

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

Question 27

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)

Question 28

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

Question 29

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

Question 30

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

Question 31

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

A) prime
B) markup
C) cash flow
D) discount

Question 32

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

Question 33

Projects should first and foremost address business ____.

A) portfolios
B) ventures
C) needs
D) practices

Question 34

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

Question 35

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

A) ($1400)
B) ($100)
C) $0
D) $100

Question 36

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

Question 37

____ 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

Question 38

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

A) flow
B) statements
C) budgets
D) structure

Question 39

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

Question 40

____ 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

Question 41

An IT project in the ____ category could help transform the business.

A) growth
B) assessment
C) venture
D) discretionary

Question 42

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

Question 43

____ should be formed and continuously updated to help the organization as a whole make better strategic decisions.

A) Monitors
B) Portfolios
C) Projects
D) Programs

Question 44

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

Question 45

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

Question 46

____________________ 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.

Question 47

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

Question 48

____ are new requirements imposed by government,management,or some external influence.

A) Directives
B) Problems
C) Opportunities
D) Thresholds

Question 49

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

Question 50

After deciding which projects to pursue,organizations need to decide if it is advantageous to manage several projects together as part of a(n)____.

A) aggregate
B) program
C) cluster
D) group

Question 51

Studies show that one of the main reasons people quit their jobs is because ____.

A) there is too much risk
B) they feel they do not make enough money
C) they feel they do not make a difference
D) they feel overworked

Question 52

An organization can view project portfolio management as having ____ levels,from simplest to most complex.

A) two
B) five
C) six
D) ten

Question 53

____________________ 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.

Question 54

You can establish weights by assigning ____.

A) results
B) values
C) scores
D) points

Question 55

In portfolio management the "____" task should occur first.

A) prioritize projects on a list
B) apply modern portfolio theory
C) divide projects into investment categories
D) put all projects in one list

Question 56

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

Question 57

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

Question 58

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

Question 59

An IT project in the ____ category must be accomplished to run the business.

A) ancillary
B) redundant
C) growth
D) core

Question 60

The goal of ____ portfolio management is clear: to help maximize business value to ensure enterprise success.

A) investment
B) interest
C) project
D) program

Question 61

Describe how problems,opportunities,and directives can drive the project selection process.

Question 62

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

Question 63

Describe the role of the project portfolio manager in relation to the roles of project manager and program manager.

Question 64

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.

Question 65

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

Question 66

Provide two examples demonstrating the value of identifying projects through the observation of day-to-day operations.

Question 67

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

Question 68

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

Question 69

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

Question 70

Describe how coordinating housing projects within one program can lead to saving time and increasing authority.

Question 71

When creating a weighted scoring model,how do you identify criteria important to the project selection process?

Question 72

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

Question 73

____________________ projects helps you see the big picture,such as how many projects are supporting a growth strategy,how many are helping to increase profit margins,how many relate to marketing,and how many relate to materials.

Question 74

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

Question 75

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.