TEST BANK
Project Management in Practice,
7th Edition Meredith, Chapter 1 - 8
,TABLE OF CONTENTS
1. CHAPTER 1: THE WORLD OF PROJECT MANAGEMENT
2. CHAPTER 2: THE MANAGER, THE ORGANIZATION, AND THE TEAM
3. CHAPTER 3: PROJECT ACTIVITY AND RISK PLANNING
4. CHAPTER 4: BUDGETING THE PROJECT
5. CHAPTER 5: SCHEDULING THE PROJECT
6. CHAPTER 6: ALLOCATING RESOURCES TO THE PROJECT
7. CHAPTER 7: MONITORING AND CONTROLLING THE PROJECT
8. CHAPTER 8: EVALUATING AND CLOSING THE PROJECT
,Chapter 1: The World of Project Management
True/False
1. A primary purpose of forming projects is to assign the responsibility for
accomplishing some organizational task to a specific person or small group.
Answer: True
Response: See section 1.1 Level:
easy
2. One of the few similarities between project management and general management is
that both exist in the well-defined organizational structure of superior/subordinates
in the overall organization.
Answer: False
Response: See section 1.2 Level:
medium
3. Many recent developments in project management are being driven by changes in
the nature of the American workforce.
Answer: False
Response: See section 1.1 Level:
medium
4. There has been a growing use of projects to achieve an organization’s strategic
goals
Answer: True
Response: See section 1.1 Level:
medium
,5. While general managers have their authority limited to specific areas in the overall
organization, project managers have authority over any activity required by the
project.
Answer: False
Response: See section 1.2
Level: medium
6. Projects are always carried out under conditions of uncertainty.
Answer: True
Response: See section 1.3
Level: easy
7. One can trade-off time and cost when managing a project, but the project’s
technical specifications must be maintained exactly as the client initially specifies.
Answer: False
Response: See section 1.3
Level: medium
8. Nonnumeric project selection methods are only suitable if numeric methods are
not available.
Answer: False
Response: See section 1.5
Level: medium
9. When using financial methods for selecting projects, the payback period is the
simplest and best method to use.
Answer: False
Response: See section 1.5
Level: medium
10 Rank-ordering a large number of projects can be done with a Q-sort.
, Answer: True
Response: See section 1.5
Level: medium
11. A disadvantage of using the payback period method for selecting projects is that it
cannot reflect the time-value of money.
Answer: True
Response: See section 1.5
Level: medium
12. A disadvantage of using the discounted cash flow method (or net present value) for
selecting projects is that it ignores all non-monetary factors associated with the
project except risk.
Answer: True
Response: See section 1.5
Level: medium
13. A disadvantage of using scoring models rather than financial models for selecting
projects is that they cannot include the project’s profitability.
Answer: False
Response: See section 1.5
Level: medium
14. A PM does not need to understand why a project is selected for funding because
he did not initiate the process.
Answer: False
Response: See section 1.5
Level: medium
15. The main distinction between platform and breakthrough projects is that the
former usually depend on existing technology.
, Answer: True
Response: See section 1.6
Level: medium
16. The main distinction between platform and derivative projects is that the latter
depend on existing technology.
Answer: False
Response: See section 1.6
Level: medium
17. One reason for the emphasis on project management is that tasks fit neatly into
business-as-usual.
Answer: False
Response: See section 1.1
Level: easy
18. Programs are subdivisions of projects.
Answer: False
Response: See section 1.1
Level: easy
19. Projects are subdivisions of programs.
Answer: True
Response: See section 1.1
Level: easy
20. A similarity between project management and general management is the
tendency to ―manage by exception.‖
, Answer: False
Response: See section 1.2
Level: medium
21. Project budgets are primarily modifications of budgets for the same activity in the
previous period.
Answer: False
Response: See section 1.2
Level: medium
22. In project management, superior-subordinate relationships are known and lines of
authority are clear.
Answer: False
Response: See section 1.2
Level: medium
23. Having responsibility for the outcome of a project without the authority of rank or
position is common in project management.
Answer: True
Response: See section 1.2
Level: medium
24. Negotiating the purchase of a new car would typically be characterized as win-
win negotiation.
Answer: False
Response: See section 1.2
Level: medium
25. In project management, it is often necessary to trade-off one objective for another.
Answer: True
Response: See section 1.3
, Level: easy
26. A project that is selected because it is necessary for continued operations
exemplifies a sacred cow.
Answer: False
Response: See section 1.5
Level: medium
27. The comparative benefits method is considered a nonnumeric project selection
method.
Answer: True
Response: See section 1.5
Level: medium
28. When using the weighted scoring model, the categories for each scale must be in
equal intervals.
Answer: False
Response: See section 1.5
Level: medium
29. Scoring methods were developed to overcome some of the disadvantages of
simple financial profitability methods.
Answer: True
Response: See section 1.5
Level: medium
30. One limitation of scoring methods is that they can only incorporate quantitative
data.
Answer: False
, Response: See section 1.5
Level: medium
31. As a rule of thumb, the number of factors included in a scoring model should be
at least 10.
Answer: False
Response: See section 1.5
Level: medium
32. Projects success is not determined by the portfolio of projects in an organization.
Answer: False
Response: See section 1.6
Level: medium
33. R&D projects are oriented toward using newly developed technologies or existing
technologies in a new manner.
Answer: True
Response: See section 1.6
Level: medium
34. Projects with deliverables that are incrementally different from existing offerings
are classified as platform projects.
Answer: False
Response: See section 1.6
Level: medium
35. The project manager depends on legitimate authority to gain the cooperation of the many
departments in the organization that may be asked to supply technology, information,
resources and personnel to the project.
Answer: False
Response: See section 1.2
Level: medium
, 36. In the early years of a project when outflows usually exceed inflows, the NPV of the
project for those years will be positive.
Answer: False
Response: See section 1.5
Level: medium
Multiple Choice
37. Which of the following is not a trend in project management?
a) achieving strategic goals
b) improving project effectiveness
c) quasi projects
d) reductive projects
e) achieving routine goals
Answer: d
Response: See section 1.1
Level: medium
38. Which of the following criteria can be included in scoring models for selecting
projects?
a) potential profitability of the project
b) potential impact on the firm’s competitive position
c) the organization’s ability to market the output of a project
d) All of the above can be included
e) only a and b above
Answer: d
Response: See section 1.5
Level: medium
39. If the initial investment is a project is $100,000 and the expected annual net profit
for the project is $20,000, the payback period is:
a) One fifth of a year
b) 4 years
c) 5 years
Project Management in Practice,
7th Edition Meredith, Chapter 1 - 8
,TABLE OF CONTENTS
1. CHAPTER 1: THE WORLD OF PROJECT MANAGEMENT
2. CHAPTER 2: THE MANAGER, THE ORGANIZATION, AND THE TEAM
3. CHAPTER 3: PROJECT ACTIVITY AND RISK PLANNING
4. CHAPTER 4: BUDGETING THE PROJECT
5. CHAPTER 5: SCHEDULING THE PROJECT
6. CHAPTER 6: ALLOCATING RESOURCES TO THE PROJECT
7. CHAPTER 7: MONITORING AND CONTROLLING THE PROJECT
8. CHAPTER 8: EVALUATING AND CLOSING THE PROJECT
,Chapter 1: The World of Project Management
True/False
1. A primary purpose of forming projects is to assign the responsibility for
accomplishing some organizational task to a specific person or small group.
Answer: True
Response: See section 1.1 Level:
easy
2. One of the few similarities between project management and general management is
that both exist in the well-defined organizational structure of superior/subordinates
in the overall organization.
Answer: False
Response: See section 1.2 Level:
medium
3. Many recent developments in project management are being driven by changes in
the nature of the American workforce.
Answer: False
Response: See section 1.1 Level:
medium
4. There has been a growing use of projects to achieve an organization’s strategic
goals
Answer: True
Response: See section 1.1 Level:
medium
,5. While general managers have their authority limited to specific areas in the overall
organization, project managers have authority over any activity required by the
project.
Answer: False
Response: See section 1.2
Level: medium
6. Projects are always carried out under conditions of uncertainty.
Answer: True
Response: See section 1.3
Level: easy
7. One can trade-off time and cost when managing a project, but the project’s
technical specifications must be maintained exactly as the client initially specifies.
Answer: False
Response: See section 1.3
Level: medium
8. Nonnumeric project selection methods are only suitable if numeric methods are
not available.
Answer: False
Response: See section 1.5
Level: medium
9. When using financial methods for selecting projects, the payback period is the
simplest and best method to use.
Answer: False
Response: See section 1.5
Level: medium
10 Rank-ordering a large number of projects can be done with a Q-sort.
, Answer: True
Response: See section 1.5
Level: medium
11. A disadvantage of using the payback period method for selecting projects is that it
cannot reflect the time-value of money.
Answer: True
Response: See section 1.5
Level: medium
12. A disadvantage of using the discounted cash flow method (or net present value) for
selecting projects is that it ignores all non-monetary factors associated with the
project except risk.
Answer: True
Response: See section 1.5
Level: medium
13. A disadvantage of using scoring models rather than financial models for selecting
projects is that they cannot include the project’s profitability.
Answer: False
Response: See section 1.5
Level: medium
14. A PM does not need to understand why a project is selected for funding because
he did not initiate the process.
Answer: False
Response: See section 1.5
Level: medium
15. The main distinction between platform and breakthrough projects is that the
former usually depend on existing technology.
, Answer: True
Response: See section 1.6
Level: medium
16. The main distinction between platform and derivative projects is that the latter
depend on existing technology.
Answer: False
Response: See section 1.6
Level: medium
17. One reason for the emphasis on project management is that tasks fit neatly into
business-as-usual.
Answer: False
Response: See section 1.1
Level: easy
18. Programs are subdivisions of projects.
Answer: False
Response: See section 1.1
Level: easy
19. Projects are subdivisions of programs.
Answer: True
Response: See section 1.1
Level: easy
20. A similarity between project management and general management is the
tendency to ―manage by exception.‖
, Answer: False
Response: See section 1.2
Level: medium
21. Project budgets are primarily modifications of budgets for the same activity in the
previous period.
Answer: False
Response: See section 1.2
Level: medium
22. In project management, superior-subordinate relationships are known and lines of
authority are clear.
Answer: False
Response: See section 1.2
Level: medium
23. Having responsibility for the outcome of a project without the authority of rank or
position is common in project management.
Answer: True
Response: See section 1.2
Level: medium
24. Negotiating the purchase of a new car would typically be characterized as win-
win negotiation.
Answer: False
Response: See section 1.2
Level: medium
25. In project management, it is often necessary to trade-off one objective for another.
Answer: True
Response: See section 1.3
, Level: easy
26. A project that is selected because it is necessary for continued operations
exemplifies a sacred cow.
Answer: False
Response: See section 1.5
Level: medium
27. The comparative benefits method is considered a nonnumeric project selection
method.
Answer: True
Response: See section 1.5
Level: medium
28. When using the weighted scoring model, the categories for each scale must be in
equal intervals.
Answer: False
Response: See section 1.5
Level: medium
29. Scoring methods were developed to overcome some of the disadvantages of
simple financial profitability methods.
Answer: True
Response: See section 1.5
Level: medium
30. One limitation of scoring methods is that they can only incorporate quantitative
data.
Answer: False
, Response: See section 1.5
Level: medium
31. As a rule of thumb, the number of factors included in a scoring model should be
at least 10.
Answer: False
Response: See section 1.5
Level: medium
32. Projects success is not determined by the portfolio of projects in an organization.
Answer: False
Response: See section 1.6
Level: medium
33. R&D projects are oriented toward using newly developed technologies or existing
technologies in a new manner.
Answer: True
Response: See section 1.6
Level: medium
34. Projects with deliverables that are incrementally different from existing offerings
are classified as platform projects.
Answer: False
Response: See section 1.6
Level: medium
35. The project manager depends on legitimate authority to gain the cooperation of the many
departments in the organization that may be asked to supply technology, information,
resources and personnel to the project.
Answer: False
Response: See section 1.2
Level: medium
, 36. In the early years of a project when outflows usually exceed inflows, the NPV of the
project for those years will be positive.
Answer: False
Response: See section 1.5
Level: medium
Multiple Choice
37. Which of the following is not a trend in project management?
a) achieving strategic goals
b) improving project effectiveness
c) quasi projects
d) reductive projects
e) achieving routine goals
Answer: d
Response: See section 1.1
Level: medium
38. Which of the following criteria can be included in scoring models for selecting
projects?
a) potential profitability of the project
b) potential impact on the firm’s competitive position
c) the organization’s ability to market the output of a project
d) All of the above can be included
e) only a and b above
Answer: d
Response: See section 1.5
Level: medium
39. If the initial investment is a project is $100,000 and the expected annual net profit
for the project is $20,000, the payback period is:
a) One fifth of a year
b) 4 years
c) 5 years
