C722 Project Management Terminology: A Complete Guide
charter - correct answer ✔✔ a document that, like a contract, is agreed upon by the sponsor and key
stakeholders. It defines the project and authorizes the resources, roles, responsibilities, authorities, and
scope for the project Pg 13
triple constraint - correct answer ✔✔ cost (budget), schedule (time), and scope (deliverables) Pg 17
Work Breakdown Structures (WBS) - correct answer ✔✔ a key tool so that people understand what is
expected of them and how they will be held accountable Pg 21
Project Management Institute (PMI) - correct answer ✔✔ Founded in 1969, it's headquartered in
Newton, PA, and has member chapters on every continent (except Antarctica). Publishes foundational
and practice standards and is the largest in the world. Pg 22
AXELOS, Ltd - correct answer ✔✔ a joint venture between the government of the United Kingdom and
Captia PLC. It was formed to manage and grow a number of standards and associated certifications
developed by the Cabinet office, including ITIL (Information Technology Infrastructure Library), PRINCE2,
and Managing Successful Programs (MSP). Pg 22
Functional (Departmentalized) Organization pros/cons - correct answer ✔✔ Pros: Lines of authority are
clear; work is easily prioritized by identified departmental authority
Cons: Utilizing resources across functions can be difficult; project is not managed holistically
Projectized Organization pros and cons - correct answer ✔✔ Pros: Clear lines of authority; project is
managed holistically; gain historical data from prior projects.
Cons: Approach is expensive because of the duplication of personnel; SME assigned may not have the
most appropriate knowledge or expertise for the project
Matrix Organization pros and cons - correct answer ✔✔ Pros: Central focus is the project; issues are
responded to quickly.
, Cons: Requires cooperation and coordination between and among functional departments and project
managers; resource balancing between projects can lead to friction.
project management office (PMO) - correct answer ✔✔ A process for determining if the level of
documentation and best practices followed in project execution. Pg 26
Project Management Maturity Level - correct answer ✔✔ Determined by the comprehensiveness of
written procedures to accomplish tasks in each of the process areas identified by PMI. Pg 26
Non-numeric project selection models - correct answer ✔✔ A process of selecting projects; not limited
to traditional numeric performance measures; includes Competitive Necessity, Operating Necessity,
Sacred Cow, and Checklist.
Return on Investment (ROI) - correct answer ✔✔ (NET PROFIT / COST OF INVESTMENT) * 100 Pg 32
time value of money - correct answer ✔✔ Money is worth more to an organization now than in the
future. Pg 35
payback period - correct answer ✔✔ Calculates the amount of time required to earn back the cost of
doing the project. Pg 36
Internal rate of return (IRR) - correct answer ✔✔ To calculate future cash flows using time and interest
rate; evaluates potential projects as if they were financial investments. Pg 37
net present value (NPV) - correct answer ✔✔ To calculate whether revenue tomorrow is greater than
costs today; A financial measure of the total future benefits of a project minus the costs of the project.
Pg 38
future net cash flows - correct answer ✔✔ Amount a company expects to realize from a project before
that project begins. Pg 38
Project Phases - correct answer ✔✔ Defining, Planning, Executing, and Closing
charter - correct answer ✔✔ a document that, like a contract, is agreed upon by the sponsor and key
stakeholders. It defines the project and authorizes the resources, roles, responsibilities, authorities, and
scope for the project Pg 13
triple constraint - correct answer ✔✔ cost (budget), schedule (time), and scope (deliverables) Pg 17
Work Breakdown Structures (WBS) - correct answer ✔✔ a key tool so that people understand what is
expected of them and how they will be held accountable Pg 21
Project Management Institute (PMI) - correct answer ✔✔ Founded in 1969, it's headquartered in
Newton, PA, and has member chapters on every continent (except Antarctica). Publishes foundational
and practice standards and is the largest in the world. Pg 22
AXELOS, Ltd - correct answer ✔✔ a joint venture between the government of the United Kingdom and
Captia PLC. It was formed to manage and grow a number of standards and associated certifications
developed by the Cabinet office, including ITIL (Information Technology Infrastructure Library), PRINCE2,
and Managing Successful Programs (MSP). Pg 22
Functional (Departmentalized) Organization pros/cons - correct answer ✔✔ Pros: Lines of authority are
clear; work is easily prioritized by identified departmental authority
Cons: Utilizing resources across functions can be difficult; project is not managed holistically
Projectized Organization pros and cons - correct answer ✔✔ Pros: Clear lines of authority; project is
managed holistically; gain historical data from prior projects.
Cons: Approach is expensive because of the duplication of personnel; SME assigned may not have the
most appropriate knowledge or expertise for the project
Matrix Organization pros and cons - correct answer ✔✔ Pros: Central focus is the project; issues are
responded to quickly.
, Cons: Requires cooperation and coordination between and among functional departments and project
managers; resource balancing between projects can lead to friction.
project management office (PMO) - correct answer ✔✔ A process for determining if the level of
documentation and best practices followed in project execution. Pg 26
Project Management Maturity Level - correct answer ✔✔ Determined by the comprehensiveness of
written procedures to accomplish tasks in each of the process areas identified by PMI. Pg 26
Non-numeric project selection models - correct answer ✔✔ A process of selecting projects; not limited
to traditional numeric performance measures; includes Competitive Necessity, Operating Necessity,
Sacred Cow, and Checklist.
Return on Investment (ROI) - correct answer ✔✔ (NET PROFIT / COST OF INVESTMENT) * 100 Pg 32
time value of money - correct answer ✔✔ Money is worth more to an organization now than in the
future. Pg 35
payback period - correct answer ✔✔ Calculates the amount of time required to earn back the cost of
doing the project. Pg 36
Internal rate of return (IRR) - correct answer ✔✔ To calculate future cash flows using time and interest
rate; evaluates potential projects as if they were financial investments. Pg 37
net present value (NPV) - correct answer ✔✔ To calculate whether revenue tomorrow is greater than
costs today; A financial measure of the total future benefits of a project minus the costs of the project.
Pg 38
future net cash flows - correct answer ✔✔ Amount a company expects to realize from a project before
that project begins. Pg 38
Project Phases - correct answer ✔✔ Defining, Planning, Executing, and Closing
