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Chapter 4 material - Self-assessment review questions and answers for Chapter 4
Which of the following statements are true?
I A project is an investment
II Project selection is rarely related to an organisation's long-term strategy and business plan- I only
- II only
- I and II
- Neither I nor II
Which of the following is correct? The principal purpose of a business case is to:
- approve the project charter
- obtain the funding for a project
- obtain management commitment and approval for investment
- to educate the end user about the project
Which of the following is concerned with managing and prioritising sets of projects?
I Scoring and ranking models
II Portfolio optimisation- I only
- II only
- I and II
- Neither I nor II
Which of the following is not a scoring and ranking model?
- Decision tree
- Analytic hierarchy process
- Simple multi-attribute rating technique
- Satisficing
Which of the following is correct? Prioritisation techniques should reflect:
I the degree of business risk involved
II the organisation's internal and external environment
III cost of prioritisation activities compared to expected project returns- I and II only
- I and III only
- II and III only
- I, II and III
Which of the following is correct? The purpose of a feasibility study is to:
- assess the factors which might affect the project
- determine if a business opportunity is possible
- improve confidence in the project idea
- all of the above
Which of the following financial analysis methods requires a discount rate?
- Net present value
- Payback period
- Internal rate of return
- All of the above
Which of the following is correct? The cost of capital is
- the annual capital budget of an organisation
- the opportunity cost of an investment
- the expected return on an investment
- the capital expenditure required on a project
