1
Jesse's CMQ-OEQUESTIONS AND ASWERS
In selecting among different projects, the time value of money is considered
for which of the following reasons?
I. To perform a cost-benefit analysis
II. To prioritize investments
III. To predict cash flow
IV. To reduce operating costs
a) I, II, and III only
b) I, II, III, and IV
c) III and IV only
d) I and II only - -Correct Answer-(D) The time value of money is considered
to perform a cost-benefit analysis and prioritize investments.
Q. The best tool for discovering relationships between two groups of ideas is
a:
I. Force field analysis
II. Matrix diagram
III. Prioritization matrix
1
, 2
IV. Process Decision Program Chart (PDPC) - -Correct Answer-(II) A matrix
diagram will effectively uncover relationships between two groups of ideas
Which of the following is the biggest problem in cost-benefit analysis?
I. It is easier to accurately estimate benefits than costs.
II. It is easier to accurately estimate costs than benefits.
III. It is an elaborate tool requiring extensive computer support.
IV. It is too difficult to compute the time value of money. - -Correct Answer-
(II) It is easier to accurately estimate costs than benefits
Q. Which of the following is the definition for Internal Rate of Return (IRR)?
I. A discounted cash flow technique for finding the present value of each
future year's cash flow
II. What remains from all money taken in after all expenses are paid
III. The discount rate that causes net present value to equal zero
2
, 3
IV. The amount of money earned as a result of completing a project, selling a
product, or providing a service - -Correct Answer-(III) The discount rate that
causes NPV to equal zero
Given the following budget, calculate the actual variance for the entire
budget.
Advertising Expenses 2007 Budgeted 2007 Actual
Yellow Pages $100.00 $175.00
Radio $750.00 $950.00
Television $500.00 $500.00
Internet $2,500.00 $2,600.00
Direct Mailing $50.00 $25.00
Annual Open House $100.00 $535.00
Total Advertising Expenses $4,000.00 $4,785.00
I. 0.1963
II. -0.1963
III. 1.1963
IV. 0.8359 - -Correct Answer-(I) (4785-4000)/4000
3
, 4
Note: A negative variance means the budget was under spent. In this
instance,
more money was spent than was budgeted. (4785-4000)/4000
Q. Work breakdown structure means which of the following:
I. The project plan has failed due to a lack of support by upper management.
II. An autopsy of successfully completed projects has been completed.
III. The statement of work has been divided into the detailed listing of required
activities.
IV. The resources required for a project have not been provided. - -Correct
Answer-(III) A work breakdown structure (WBS) is a project management
technique by which a project is divided into tasks, subtasks, and units of work
to be performed.
Q. Which of the following are true of the critical path of a project?
I. The project is important
II. Events on the critical path have no slack time
III. Delays of events on the critical path delay the project
IV. Slack times can be added to the events on the critical path without
delaying the project.
4
Jesse's CMQ-OEQUESTIONS AND ASWERS
In selecting among different projects, the time value of money is considered
for which of the following reasons?
I. To perform a cost-benefit analysis
II. To prioritize investments
III. To predict cash flow
IV. To reduce operating costs
a) I, II, and III only
b) I, II, III, and IV
c) III and IV only
d) I and II only - -Correct Answer-(D) The time value of money is considered
to perform a cost-benefit analysis and prioritize investments.
Q. The best tool for discovering relationships between two groups of ideas is
a:
I. Force field analysis
II. Matrix diagram
III. Prioritization matrix
1
, 2
IV. Process Decision Program Chart (PDPC) - -Correct Answer-(II) A matrix
diagram will effectively uncover relationships between two groups of ideas
Which of the following is the biggest problem in cost-benefit analysis?
I. It is easier to accurately estimate benefits than costs.
II. It is easier to accurately estimate costs than benefits.
III. It is an elaborate tool requiring extensive computer support.
IV. It is too difficult to compute the time value of money. - -Correct Answer-
(II) It is easier to accurately estimate costs than benefits
Q. Which of the following is the definition for Internal Rate of Return (IRR)?
I. A discounted cash flow technique for finding the present value of each
future year's cash flow
II. What remains from all money taken in after all expenses are paid
III. The discount rate that causes net present value to equal zero
2
, 3
IV. The amount of money earned as a result of completing a project, selling a
product, or providing a service - -Correct Answer-(III) The discount rate that
causes NPV to equal zero
Given the following budget, calculate the actual variance for the entire
budget.
Advertising Expenses 2007 Budgeted 2007 Actual
Yellow Pages $100.00 $175.00
Radio $750.00 $950.00
Television $500.00 $500.00
Internet $2,500.00 $2,600.00
Direct Mailing $50.00 $25.00
Annual Open House $100.00 $535.00
Total Advertising Expenses $4,000.00 $4,785.00
I. 0.1963
II. -0.1963
III. 1.1963
IV. 0.8359 - -Correct Answer-(I) (4785-4000)/4000
3
, 4
Note: A negative variance means the budget was under spent. In this
instance,
more money was spent than was budgeted. (4785-4000)/4000
Q. Work breakdown structure means which of the following:
I. The project plan has failed due to a lack of support by upper management.
II. An autopsy of successfully completed projects has been completed.
III. The statement of work has been divided into the detailed listing of required
activities.
IV. The resources required for a project have not been provided. - -Correct
Answer-(III) A work breakdown structure (WBS) is a project management
technique by which a project is divided into tasks, subtasks, and units of work
to be performed.
Q. Which of the following are true of the critical path of a project?
I. The project is important
II. Events on the critical path have no slack time
III. Delays of events on the critical path delay the project
IV. Slack times can be added to the events on the critical path without
delaying the project.
4
