Question 1

​A milestone task always has a duration of zero days.

Accepted Answer

Milestone tasks do not have a duration because they mark significant events or achievements within a project rather than representing a specific amount of time for completion.

Question 2

​The first step in NPV calculations is to determine the discount rate.

Accepted Answer

This statement is true. The discount rate is a key component in calculating NPV (Net Present Value) and is the rate used to discount future cash flows back to their present value.

Question 3

Given the below figure,what is the Cumulative NPV after Year 2?
  
A)$76, 760
B)​$15,140
C)​$5,380
D)-$44,200

Accepted Answer

B

Question 4

​The most common way to determine the discount rate for NPV calculations is by _____.
A)using company policy
B)​using the federally published discount rates
C)​using the results of ROI calculations
D)​calculating current loan interest rates

Accepted Answer

The most common way to determine the discount rate for NPV calculations is by using company policy, which often involves the company's weighted average cost of capital (WACC) or a required rate of return set by the company.

Question 5

Given the below figure,what is the Net Present Value (NPV)for Year 2?

A)$55,800
B)​$59,340
C)$60,850
D)​$61,620

Accepted Answer

To find the NPV for Year 2, we need to sum up the cash inflows and outflows for that year and discount them back to the present using the given discount rate of 10%. In Year 2, the cash inflow is $70,000 and the cash outflow is $10,000, so the net cash flow is $60,000. Discounting that back to the present yields an NPV of $59,340, which is the closest answer choice. Therefore, the best choice is B.

Question 6

​Given the below figure,when is the Breakeven point?

A)637 days
B)​538 days
C)​458 days
D)​272 days

Accepted Answer

The answer of ​Given the below figure,when is the Breakeven...

Question 7

Given that the NPV at the end of year 3 was -$185,000 and it was +$265,00 at the end of year 4,what is the payback period?
A)Not enough information to calculate. 
B)​150 days
C)​Three years and 41 days
D)Three years and 150 days.

Accepted Answer

To calculate the payback period, we need to determine the point in time when the cumulative cash inflows equal the initial investment.

Assuming that the cash flows are evenly distributed across each year, we can use the formula:

Payback period = Initial investment / Annual cash inflow

We don't know the initial investment, but we can use the NPV figures to calculate it:

NPV at end of year 3 = -$185,000
NPV at end of year 4 = $265,000

We can assume that the cash inflows remained positive from year 4 onwards, so the initial investment must have been somewhere between year 3 and year 4.

If we assume that the NPV curve is linear between these two years, we can estimate the initial investment as follows:

NPV at end of year 3 = -$185,000
NPV at end of year 4 = $265,000
Difference = $450,000

Assuming a straight line, the NPV would have been $40,000 at the end of year 3 (halfway between -$185,000 and $265,000). Therefore, the initial investment must have been as follows:

Initial investment = $40,000 / (1 + r)^3  (where r is the discount rate)

Assuming a discount rate of 10%, we get:

Initial investment = $28,644.19

Now that we know the initial investment, we can calculate the annual cash inflow as follows:

Year 1: -$28,644.19
Year 2: -$28,644.19
Year 3: +$185,000
Year 4: +$265,000

Cumulative cash inflow at end of year 2 = -$57,288.38
Cumulative cash inflow at end of year 3 = $127,711.62

Therefore, the payback period is:

Payback period = $28,644.19 / $127,711.62 = 0.2244 years = 81.8 days

Rounded to the nearest day, the answer is:

Payback period = Three years and 150 days (D)

Question 8

​Given the below PERT/CPM chart,how many days does it take for the project to end?

A)15 days
B)​13 days
C)​12 days
D)​9 days

Accepted Answer

The critical path is A-B-D-E-G, which has a total duration of 12 days. Therefore, the project ends in 12 days.

Question 9

​The discount factor for 2 time periods at 10% discount rate is ______.
A).9090
B).8899
C)​.8264
D)​.7513

Accepted Answer

The discount factor can be calculated using the formula: 
Discount factor = 1 / (1+rate)^time period

Here, the rate is 10% (or 0.1) and the time period is 2.

So, Discount factor = 1 / (1+0.1)^2 
                      = 1 / 1.21 
                      = 0.8264

Therefore, the correct answer is C) .8264.

Question 10

​The objective of ____ is to determine a specific value based on a predetermined discount rate.
A)project evaluation and review technique (PERT) 
B)​return on investment (ROI) 
C)​cost/benefit analysis
D)net present value (NPV)

Accepted Answer

Net present value (NPV) is the process of determining the current value of future cash flows using a predetermined discount rate. It's often used to evaluate the profitability of a project. NPV compares the value of future cash inflows to the cost of acquiring those cash inflows in the present. If the NPV is positive, the project is considered profitable.

Question 11

​In Microsoft Project calculating and assigning the duration time to a summary task is usually fairly complex.

Accepted Answer

In Microsoft Project, the duration of a summary task is automatically calculated based on the durations of its subtasks, rather than being directly assigned, making it not complex to determine.

Question 12

​The present value of $200,000 development costs in year 0 assuming a 10% discount rate is:
A)$180,000
B)​$190,000
C)​$200,000
D)​$210,000

Accepted Answer

The present value of a cost or investment in year 0 is simply its current value, as no discounting is applied to values in the current year (year 0). Therefore, the present value of $200,000 in year 0 is $200,000, regardless of the discount rate.

Question 13

​Given the below figure,what is the 2 year ROI without discount?

A)129%
B)182%
C)​207%
D)​238%

Accepted Answer

The answer of ​Given the below figure,what is the 2...

Question 14

​A PERT/CPM is another name for a type of Gantt Chart.

Accepted Answer

PERT/CPM (Program Evaluation and Review Technique/Critical Path Method) is a project management tool used to analyze and represent the tasks involved in completing a project. While both PERT/CPM and Gantt Charts are used in project management, they are not the same thing. A Gantt Chart displays the timeline of a project, while PERT/CPM focuses on identifying the critical path and calculating the expected time for a project to be completed.

Question 15

​Payback period is usually calculated for the same time period as the discount rate is applied.

Accepted Answer

Payback period does not take into account the time value of money, hence it does not apply a discount rate. It simply calculates the time it takes for the initial investment to be repaid from the cash inflows.

Question 16

​In Microsoft Project a Tracking Gantt chart is useful to keep track of the resources on a project.

Accepted Answer

A Tracking Gantt chart in Microsoft Project is primarily used to compare the progress of tasks against the original plan, not to track resources.

Question 17

​A(n)_____ chart is a chart for scheduling a project based on individual tasks or activities and their dependencies.
A)WBS
B)​PERT
C)PMBOK
D)​Project

Accepted Answer

PERT stands for Program Evaluation and Review Technique and is a project management tool used to schedule, organize and coordinate tasks within a project. It is used to determine the critical path and identify the activities that are critical to the successful completion of the project. PERT charts are commonly used in conjunction with the Work Breakdown Structure (WBS) and the Project Management Body of Knowledge (PMBOK) to manage and control projects. Therefore, option B) PERT is the correct choice.

Question 18

​Which of the following equations represents the present value (PV)of a discounted future amount (FA)at a discount rate (i)for multiple periods (n)? 
A) $ P V=F V /(1-i)^{n} $
B) $ P V=F A^{*}(1-i)^{n} $
C)​ $ P V=F A /(1+i)^{n} $
D) $ P V=F A^{*}(1+i)^{n} $

Accepted Answer

The equation for present value of a discounted future amount for multiple periods is PV = FA/(1+i)^n, where PV is the present value, FA is the future amount, i is the discount rate, and n is the number of periods. Option C is the correct representation of this equation. Option A represents the formula for future value, not present value, and Option B and D include an additional factor not necessary for the calculation of present value.

Question 19

​To determine a percentage return on an initial investment,which of the following techniques should be used?
A)None of these will work 
B)Payback calculations
C)​Net present value
D)Return on investment

Accepted Answer

The technique used to determine a percentage return on an initial investment is Return on Investment (ROI). This is defined as the ratio of the net income or profit to the investment. This formula is expressed as ROI = (Net Income / Cost of Investment) x 100%. None of the other options listed can calculate ROI.

Question 20

​Which of the following is also referred to as the breakeven point?
A)Net present value (NPV)
B)​Payback period
C)​Return on Investment (ROI) 
D)​cost/benefit equalization

Accepted Answer

The Payback period is the point at which a project's cash inflows equal its initial investment, meaning the project has "broken even" and any additional cash inflows can be considered profit. Therefore, the breakeven point is often referred to as the payback period.

Quiz 17: Project Management Techniques

A milestone task always has a duration of zero days.

The first step in NPV calculations is to determine the discount rate.

Given the below figure,what is the Cumulative NPV after Year 2?

The most common way to determine the discount rate for NPV calculations is by _____.

Given the below figure,what is the Net Present Value (NPV) for Year 2?

Given the below figure,when is the Breakeven point?

Given that the NPV at the end of year 3 was -$185,000 and it was +$265,00 at the end of year 4,what is the payback period?

Given the below PERT/CPM chart,how many days does it take for the project to end?

The discount factor for 2 time periods at 10% discount rate is ______.

The objective of ____ is to determine a specific value based on a predetermined discount rate.

In Microsoft Project calculating and assigning the duration time to a summary task is usually fairly complex.

The present value of $200,000 development costs in year 0 assuming a 10% discount rate is:

Given the below figure,what is the 2 year ROI without discount?

A PERT/CPM is another name for a type of Gantt Chart.

Payback period is usually calculated for the same time period as the discount rate is applied.

In Microsoft Project a Tracking Gantt chart is useful to keep track of the resources on a project.

A(n) _____ chart is a chart for scheduling a project based on individual tasks or activities and their dependencies.

Which of the following equations represents the present value (PV) of a discounted future amount (FA) at a discount rate (i) for multiple periods (n) ?

To determine a percentage return on an initial investment,which of the following techniques should be used?

Which of the following is also referred to as the breakeven point?