Integrate Planning Flashcards
What is the estimating technique used to identify the relative size of user stories using the Fibonacci sequence?
A. Speedboat
B. Planning poker
C. Prune the product tree
D. Buy a feature
Answer: B
Process - Task 9 - Integrate Planning
Option B is correct. Planning poker is a means of estimating story point values for user stories. The game utilizes playing cards that often incorporate the Fibonacci sequence to assist in relative sizing. Speedboat is a game utilized to identify problems, issues, and solutions. Prune the product tree is used to identify infrastructure, core functionality, and features. Buy a feature is a game used to help prioritize user stories.
There are multiple software implementation projects in the company pipeline under consideration. Knowing that you will be the project manager on the project that is selected, you are curious to get a sense of which project they might select even before the decision is made by the executives. In an effort to get a heads-up, you ask the PMO for the BCR scores of each of the projects that are being considered. The BCR for one of the projects is calculated at 1.8. What does this tell you?
A. Revenue from the project equals 1.8 times the profit
B. Cost of the project is 1.8 times the profit
C. Revenue from the project is 1.8 times the cost
D. Cost of the project is 1.8 times the payback on the project
Answer: C
Process - Task 9 - Integrate Planning
BCR stands for benefit cost ratio and it measures the benefits (revenue) against the cost of implementing the project.
The executives have just returned from their annual officer retreat. The corporate goals for the coming fiscal year have been finalized, and various portfolios of projects aligned to those annual goals have been created. The project selection committee is assessing the various project choices using the concept of payback period. A project’s payback period ends when which of the following occurs?
A. maximum profit for that period is realized
B. the project pays back a loan
C. total monthly revenue equals total monthly costs
D. cumulative revenue equals cumulative costs
Answer: D
Process - Task 9 - Integrate Planning
Project Payback period ends when cumulative revenue equals cumulative costs.
Your project is using the Scrum framework and there are several teams each with its own Scrum Master. Since there are so many teams, it is getting difficult to coordinate the work and communicate between the teams. What would be the best approach to alleviate this problem?
A. Host regular meetings with all the team members to provide status and share lessons learned.
B. Set up a Scrum of Scrums to coordinate the work of the teams.
C. Invite all teams to the daily standup meeting.
D. Create a group chat and information sharing sessions to keep all team members apprised of updates.
Answer: B
Process - Task 9 - Integrate Planning
A Scrum of Scrums is an approach for coordinating multiple teams where a representative for each team (usually the Scrum Master) will attend and share information. If you host regular meetings (such as a standup) with all team members on all teams then this will rapidly get out of hand (standups should only be 15 minutes). Creating a group chat might be fine for exchanging information, but that will not be efficient for coordinating the work.
Your project will cost your organization $250,000 to complete over the next eight months. Once the project is completed, the deliverables will begin earning the company $2,500 per month. Which of the following represents the time to recover the costs of the project?
A. Not enough information to know
B. 62 months
C. 108 months
D. 92 months
Answer: C
Process - Task 9 - Integrate Planning
The time to recover money from the project is 108 months. This is calculated by dividing the project cost by $2,500 per month (and adding 8 months for the deliverable to be completed).
The Simons Company is always trying to get the best return on its investment. If the current interest rate is 6% and the return on investment (ROI) is 1.73, the return that a company would earn if it invests in the project is best characterized as which of the following?
A. IRR
B. BCR
C. Present value (PV)
D. Earned value
Answer: A
Process - Task 9 - Integrate Planning
The internal rate of return (IRR) is the interest rate that makes the net present value of all cash flows equal zero. Answer B is incorrect because the benefit cost ratio identifies the relationship between the cost and benefits of a proposed project. Answer C is incorrect because present value (PV) is the value today of future cash flows. Answer D is incorrect because earned value is the work accomplished plus the authorized budget for the work. It is the sum of the approved cost estimates for activities completed during a given time period. This was previously called the budgeted cost of work performed (BCWP).
Your team has gathered to help you determine the relative size of new user stories. The product owner describes a user story to the team, and the team, in turn, discusses the user story and asks questions of the product owner as needed. Each team member privately selects one card to represent his or her estimate. When the cards are revealed it is clear that there is a misunderstanding about the work, and a discussion begins. You decide to use an execution practice that will dedicate a specified amount of time for the team to research the problem. What is this execution practice called?
Answer: C
Process - Task 9 - Integrate Planning
A spike is a time-boxed research or experiment. Planning poker is a group estimating technique used to determine the relative sizing/complexity of user stories and or features. Read more about the agile execution practices in the Agile Practice Guide p. 56.
You are a new project manager working with a new team. So far it has been rather bumpy and you are concerned that the team may not be progressing as efficiently as possible. It seems that your team continues to reconsider previous decisions and you are growing concerned. You decide to review the PMBOK Guide to provide structure to your project. In which process group should you finalize your schedule, budget and scope baselines?
A. Executing
B. Monitoring and Controlling
C. Closing
D. Planning
Answer: D
Process - Task 9 - Integrate Planning
All these are done as part of the Planning Process Group, though each may be modified during subsequent process groups if the situation warrants (provided the change control authorities permit the change).
Your team has gathered to help you determine the relative size of new user stories. The product owner describes a user story to the team, and the team internally discusses the user story and asks questions of the product owner as needed. Once a common understanding has been achieved each team member privately selects one card to represent his or her estimate. Each team member holds a deck of cards with values of 0, 1, 2, 3, 5, 8, 13, 20, 40, and 100. The value of each card represents the number of story points the team member estimates for that particular piece of work. All cards are then revealed at the same time. What is this estimating technique called?
A. Delphi Technique
B. Planning Poker
C. Iteration Based Point Value Estimating
D. Nominal Group Technique
Answer: B
Process - Task 9 - Integrate Planning
Planning poker is a group estimating technique used to determine the relative sizing/complexity of user stories and or features. Delphi technique and nominal group technique are close, and you could make the argument that this is a variant of the Delphi technique, but Planning Poker is the more definitively correct answer.
You are reporting and comparing actual project results against the project management plan, analyzing performance data, determining if corrective or preventive action should be recommended, and monitoring the implementation of approved change requests. Which process are you performing?
A. Direct and Manage Project Work
B. Manage Stakeholders Engagement
C. Monitor and Control Project Work
D. Perform Quality Assurance
Answer: C
Process - Task 9 - Integrate Planning
The Monitor and Control Project Work process involves comparing project results to baseline plans, gathering and recording data, recommending corrective actions, and ensuring the proper implementation of approved change requests.
Knowledge can be documented using all of the following EXCEPT:
A. Videos
B. Documents
C. Audio
D. Audit
Answer: D
Process - Task 9 - Integrate Planning
An audit is a structured, independent process used to determine if activities comply with policies and procedures. While the contributions and results of audits will be recorded in the lessons learned repository, the audit creates the result that is documented and is not itself documented.
All of the following are characteristics of the Project Management Plan except which one?
A. Serves as formal authorization for a project to commence
B. Collection of subsidiary plans
C. Must be approved by the sponsor and stakeholders
D. Progressive elaboration
Answer: A
Process - Task 9 - Integrate Planning
Answer A refers to the Charter. The project management plan includes all subsidiary plans, must be approved by the sponsor and stakeholders, and is progressively elaborated.
Your selection committee is choosing between two projects. Project A has a payback period of 18 months. Project B has a cost of $125,000 with expected cash inflows of $50,000 the first year and $25,000 per quarter after that. Which project should you recommend, based solely on this information?
A. Either Project A or Project B because the payback periods are equal
B. Project A because Project B’s payback period is 21 months
C. Project A because Project B’s payback period is 24 months
D. Project A because Project B’s payback period is 20 months
Answer: B
Process - Task 9 - Integrate Planning
Project B has a payback period of 21 months. $50,000 is received in the first 12 months with another $75,000 coming in over the next 3 quarters, or 9 months.
A team member comes to you and says he does not understand the bigger picture when it comes to how the project is going to be managed. In particular, he does not have a good grasp of the project baselines, the change control procedures, or the specific methodologies chosen to perform and regulate the work. To which document should you refer him?
A. Organizational Process Assets
B. Project Management Plan
C. Performance Measurement Baseline
D. Project Charter
Answer: B
Process - Task 9 - Integrate Planning
The project management plan sets forth the outputs of all planning areas, i.e. time, cost, etc. It also outlines any particular methodologies to be utilized during the project (i.e. Six Sigma). It also sets forth the ways in which changes will be controlled (i.e. approval process, etc.). It is the most critical document in a project and should be understood and readily accessible to the entire project team and key stakeholders as well.
Doug is a project manager at Kung Fu Tacos. He is not an accountant but he must make several financial decisions on his new project. In his research, he has found there are several accounting-related attributes he needs to consider before he talks with the steering committee about his new project. In his presentation, he needs to describe the interest rate that makes the net present value of all cash flows equal zero. This is known as which of the following?
A. Prioritization of financial outcomes
B. Future value (FV)
C. Internal rate of return
D. Net present value
Answer: C
Process - Task 9 - Integrate Planning
The internal rate of return (IRR) is the return that the company would earn if it invests in the project, and is also described as the discount rate when NPV equals 0.
You are working with potential sponsors to determine which project your company will pursue. Based on the benefit-to-cost (BCR) ratios, which of the following four projects should you recommend?
A. Project A which has a BCR of 5:2
B. Project B which has a BCR of 5:4
C. Project C which has a BCR of 3:1
D. Project D which has a BCR of 2:1
Answer: C
Process - Task 9 - Integrate Planning
When you’re asked to use benefit-to-cost (BCR) ratios to select a project, always choose the project with the highest BCR because that’s the project that gives you the most benefit for the least cost. An easy way to do it is to divide: Project A has a BCR of 5:2, and 5 / 2 is 2.5. Do that with all four projects, and you find that project C has the highest BCR.
Which of the following would be helpful to consult while developing the Project Charter?
A. Project Charter Management Plan
B. Business documents
C. Project Management Plan
D. Stakeholder Register
Answer: B
Process - Task 9 - Integrate Planning
Business documents can include the business case and benefits management plan for the project.
Manual filing systems, electronic databases, project management software, and systems that allow access to technical documentation are best described by?
A. Work performance information, an output of Control Communications
B. Communication technology, an output of Manage Communications
C. Management Systems, a tool and technique of Manage Communications
D. Communication models, a tool and technique of Control Communications
Answer: C
Process - Task 9 - Integrate Planning
Information can be managed and distributed through a variety of media including manual filing systems, electronic databases, project management software, and systems that allow access to technical documentation (such as engineering drawings, design specifications, and test plans). This is referred to as Information Management Systems, a tool and technique of the Manage Communication process.
You have been assigned to manage a project to renovate an office building. You need to determine how the project will be executed to achieve the project objectives. Whom should you consult?
A. Project manager
B. Entire project team
C. Project manager and senior management
D. Just the planning department
Answer: B
Process - Task 9 - Integrate Planning
The project management plan is the document that describes how the project will be executed, monitored, and controlled. It is created by the entire project team, including the PM. Each team member should sign off on it to ensure they are all on the same page.
The HR lead on a company-wide software implementation project has completed all the necessary exit criteria for the deliverables at this point of the project. Which of the following is most relevant for performing administrative closure?
A. Technical documentation on the product of the project, project plan documentation and project reports
B. Clearly refining variance metrics to capture within the resource histogram
C. Statement of Work
D. Project reports and project baselines
Answer: A
Process - Task 9 - Integrate Planning
Administrative closure would require project planning documentation that establishes the framework for performance reporting, product documentation for establishing that the project has met all requirements, and project reports for recording lessons learned.
You are preparing a presentation for the local PMI chapter. You are new to the group and need to deliver a meaningful and useful presentation. A key part of the presentation is project plan development. Which of the following is used for project plan development?
A. Stakeholder skills and knowledge
B. Change control system
C. Configuration management
D. Project selection methods
Answer: A
Process - Task 9 - Integrate Planning
Choice A is the correct answer. Project plan development is the creation of the final project plan for approval by the management of the performing organization. This is based on outputs from core planning processes. An understanding of the stakeholder knowledge and skills is essential for appropriate application in creating the project plan. Change control system and configuration management are methods used for integrated change control. Project selection methods are applied in selecting a project and hence are tools used for project initiation.
Which of the following processes falls under Project Integration Management?
A. Develop project charter
B. Validate Scope
C. Change control system
D. Close Procurements
Answer: A
Process - Task 9 - Integrate Planning
Develop Project charter is one of the processes in Integration Management. Note that there are Integration Management processes in each of the 5 process groups.
You are a project manager for the Smooth Ink Company, and your company manufactures ink primarily for the newspaper industry. One of the deliverables of your project includes purchasing new manufacturing equipment that will reduce production times. You’ve outlined two alternatives based on an initial investment of $76,000. Alternative A has a payback period of 27 months. Alternative B has initial cash inflows of $18,000 semi-annually for the first two years and cash inflows of $4,000 per quarter thereafter. Which alternative should you choose based on just this information?
A. A decision cannot be made based on this information alone, because the payback periods are the same.
B. Alternative A, because its payback period is shorter than Alternative B’s payback period.
C. Alternative B, because its payback period is shorter than Alternative A’s payback period.
D. A decision cannot be made, because there is not enough information in the question to compute the payback period for alternative B.
Answer: A
Process - Task 9 - Integrate Planning
The payback period for both of these alternatives is the same, so you cannot choose between them based on this information alone. The payback period for Alternative B is calculated as follows: Year 1 inflows = $36,000, Year 2 inflows = $36,000, for a total of $72,000 in 24 months. The first quarter of the next year inflows = $4,000, equaling the initial investment of $76,000. The payback period is 27 months.
The planning process group consists of 24 unique processes. Your project team is confused about which processes occur in which process groups. Which of the following processes are not part of the planning process group?
A. Define Scope, Identify Risks, Plan Stakeholder Engagement, Plan Quality Management
B. Quality Planning, Procurement Planning, Risk Response Planning, Acquire Resources
C. Plan Resource Management, Plan Schedule Management, Plan Scope Management
D. Create WBS, Define Actives, Plan Procurement Management, Determine Budget
Answer: B
Process - Task 9 - Integrate Planning
Option B includes the Acquire Resources process which is unique to the Executing Process group. Choices A, C, and D all include things that are unique to the Planning Process group.
You are able to find old files for a new project that you need to begin. Your sponsor requests that you prepare a project charter for review. Which of the following is included in the project charter?
A. Work Breakdown Structure (WBS)
B. Risk responses
C. Quality standards
D. High-level requirements
Answer: D
Process - Task 9 - Integrate Planning
The project charter includes high-level requirements of the project, among other things like a high-level budget estimate, identification of project manager and sponsor, and high-level risks.
Your project selection committee is meeting later this week and is considering initiating one of two projects. They’ve asked you to recommend the project that will allow the organization to recover its initial investment as quickly as possible. The information you’ve gathered shows the initial investment for Project A is $295,000. Monthly cash inflows for the first year are $17,000, and expected cash inflows beginning in year 2 are $36,000 per quarter. Project B has an initial investment of $332,000. Expected quarterly inflows for the first year are $44,000. Beginning in the second year, inflows are expected to be $12,000 monthly. Which project should you recommend to the committee and why?
A. Project A, because it has a payback period of 20 months, which is shorter than Project B’s payback period.
B. Project A, because it has a payback period of 16 months, which is shorter than Project B’s payback period.
C. Project A, because it has a lower initial investment than Project B.
D. Project A, because it has a payback period of 16 months, while Project B has a payback period of 21 months.
Answer: A
Process - Task 9 - Integrate Planning
The correct answer is A. Project A’s payback period is 20 months. Year 1 inflows are $204,000. Year 2 inflows for the first 8 months are $96,000, making the payback period 20 months. Project B’s payback period is 25 months. Year 1 inflows are $176,000. Year 2 inflows are $144,000, and an additional month at $12,000 makes the payback period 25 months.
After working several months as a project manager at his new company, Rick discovered that his organization has a standard for using templates and is using their digital library to obtain information on previous project outcomes. Rick sees that company culture truly values and understands the importance of organizational process assets. Which of the following is not an organizational process asset?
A. Lessons Learned files
B. Organizational policies
C. Organizational cultures
D. Historical information
Answer: C
Process - Task 9 - Integrate Planning
Organizational culture is an example of an enterprise environmental factor.
George is a well-paid global operations executive who also enjoys consulting and training. He is so popular that recently he received two offers on the same day to speak at conferences as a paid presenter. At one conference, he was offered $5,000 for his presentation on a topic that he is not fond of. He was offered $2,000 at another conference to speak on resource allocation, a topic that he enjoys. Because money is no object to George, he decides to speak about resource allocation for $2,000 and pass on the other conference. George must also use a day of vacation time with a value of $2,000 to take time off work to attend the conference. What is George’s opportunity cost to speak at the conference?
A. $1,000
B. $2,000
C. $5,000
D. $4,000
Answer: C
Process - Task 9 - Integrate Planning
The opportunity cost is the lost money that he could have been paid for the other event if he was the speaker ($5,000).
Project Management consists of 5 Process Groups and 10 Knowledge Areas. Each knowledge area has specific specialization. Of the following, which is not part of Project Integration Management?
A. The creation of the project plan
B. The integration between project team members
C. The execution of the project plan
D. The documentation of changes to the project plan
Answer: B
Process - Task 9 - Integrate Planning
Project Integration Management focuses on tying together all elements of the project plan and ensuring their proper implementation. While B could be considered accurate if the project plan called for some interaction with other project teams, the assumption cannot be made in this instance. A, C, and D are all clearly part of Project Integration Management, so they must be eliminated as answer choices.
You are in the middle of your weekly project progress meeting with the 8 team members where you need updates from each individual, and each individual needs to understand what everyone else is doing for their corresponding interactions in the upcoming week. One person is controlling the conversation by not letting others speak and interrupting others when they do speak, two other people are having their own side conversation, and because of a couple tangent conversations you are going over the end time. What should you not do in these situations?
A. Set and remind everyone of ground rules for the meeting
B. Use a parking lot for unplanned topics that come up, and when exceeding allotted time for a topic
C. Have foam balls for anyone to throw at anyone for breaking the ground rules
D. Let each team member do as they see fit because the work ultimately falls on them to complete
Answer: D
Process - Task 9 - Integrate Planning
Maybe the easy way out is D, but teams do need someone to facilitate these sessions for effective outcomes with efficient time management while ensuring the meeting objectives are accomplished. PMs need to reduce and even eliminate wasted and lost time, re-hashing and re-communicating information, and ensure all team members are engaged properly.
As a project manager you should understand all phases of a project. The summary-level sub-products whose full and satisfactory delivery marks completion of the project describes which of the following?
A. Project scope
B. Project charter
C. Project management
D. Project deliverables
Answer: D
Process - Task 9 - Integrate Planning
Deliverables are the result of a controlled project and as such should be clearly identified early in the project.
When directing and managing the project’s execution, who is responsible for ensuring the accuracy of individual task results?
A. Project manager
B. Activity owner
C. Functional manager
D. Inspection team member
Answer: B
Process - Task 9 - Integrate Planning
Individual activity owners are responsible for ensuring the accuracy and conformance to quality expectations of the results of the activity. The project manager is responsible for the products of the project as well as for the work results of the project management processes (bigger picture). An inspection team member is responsible for verifying the product’s conformance to documented quality standards. A functional manager is responsible for providing resources on the project and is typically not directly responsible for work results on the project (except in a functional organization or in some matrixed organizations where she would share this responsibility with a PM)
You are doing some analysis to help with project selection. There is ongoing debate concerning which projects to select. You have the following to choose from: Project A with an NPV of 11.5%, Project B with an NPV of 18%, Project C with an NPV of 15%, and Project D with an NPV of 13%. You can select only one project. Which should you choose?
A. Project A
B. Project B
C. Project C
D. Project D
Answer: B
Process - Task 9 - Integrate Planning
You always choose the project with the highest You always choose the project with the highest NPV. In this case, you should choose Project B with an NPV of 18%.
You are a project manager working with an agile team to create a new wire transfer system for a banking client. During one of the sprint reviews with the client, the client asks why a specific transfer summary report they were expecting to see wasn’t produced. You don’t recall that such a report was called for as one of the project’s deliverables. Where is the best place to look to confirm whether or not the report should be included in the project?
A. Project Management Plan
B. Scope baseline
C. Scope Management Plan
D. Change log
Answer: B
Process - Task 9 - Integrate Planning
While answer A is technically correct, answer B is more specific. The Scope Statement, which is part of the scope baseline (WBS and WBS Dictionary are the other parts) should clearly specify what is in and out of scope. The Scope Management Plan describes HOW scope will be defined–the how-to guide for determining which collected requirements will be boiled down into what will be in and out of scope for the project. The change log is a source for capturing scope change requests, but once approved, the scope baseline would be updated to reflect the change.
During a conversation with some team members, you are discussing some of the more complex portions of the project. The conversation is going well when another member of your team informs you their activity is 50 percent complete. Many of the team members have a sigh of relief. This is an example of which of the following?
A. Work performance data, but needs to be converted to project information
B. Work performance information, but needs to be converted to project data
C. Work performance reports which are now ready for the sponsor
D. Work performance information that must be written into a report
Answer: A
Process - Task 9 - Integrate Planning
Work performance data are raw observations like percent complete, and measurements such as actual cost, actual duration, and scope completed. Once data are collected it is analyzed against the baseline to convert it to work performance information.
The Project Management Plan contains all of the following except?
A. Management Reviews
B. Configuration Management Plan
C. Change Management Plan
D. Benefits Cost Management Plan
Answer: D
Process - Task 9 - Integrate Planning
The Benefits Cost Management Plan is not a document referenced in the PMBOK Guide. There is Cost Management Plan and the Benefits Management Plan. The Project Management Plan contains the Change Management Plan, Configuration Management Plan, Performance Measurement Baseline, Project Life Cycles, Development Approach, and Management Reviews.
You have four possible projects but can only choose one. Project A is being done over a six-year period and has a net present value (NPV) of $70,000. Project B is being done over a three-year period and has an NPV of $30,000. Project C is being done over a ten-year period and has an NPV of $40,000. Project D is being done over a one-year period and has an NPV of -$160,000. Which project should you choose?
A. Project A
B. Project B
C. Project C
D. Project D
Answer: A
Process - Task 9 - Integrate Planning
You should always pick the project with the highest Net Present Value (NPV), which in this case is Project A. Since the NPV formula already takes into consideration the time value of money, you can completely ignore the number of years. Also, remember if NPV is negative, like Project D, you always reject it.
What is the present value of $9,000 received three years from now using a seven percent interest rate? Assume all options are rounded to the nearest whole dollar.
A. $9,850
B. $7,347
C. $9,680
D. $7,354
Answer: B
Process - Task 9 - Integrate Planning
The formula for present value is PV = FV / (1 + i)^n . Plugging in the information from the question, the formula becomes $9,000 / (1 + .07)^3 = $7,346.68 which is then rounded up to the nearest dollar.
You are the project manager of a new 3-D printer implementation. As key project deliverables are being completed, the customer is unwilling to accept them, and is unsure of what they are reviewing and validating. What could you have done better to help prevent this situation?
A. Identify and communicate the key deliverables during the Develop Project Charter
B. Identify and communicate the project risks during the Risk Management Planning
C. Ensure all of the stakeholders were identified with key attribute information
D. Identify and communicate the key deliverables while developing the Project Charter.
Answer: A
Process - Task 9 - Integrate Planning
During project initiating, identifying and communicating key deliverables with key stakeholders, including the customer, creates a common understanding of what the project will deliver to meet the goals and objectives of the project.
You are a new project manager for an established financial industry company. It is a large global company with a strong matrix organizational structure. The PMO is directive and very involved in the governance of projects. When meeting with the PMO Director you discuss project plan development. Which of the following is not relevant for overall project plan development?
A. Organizational type
B. Estimating tools & techniques
C. Activity resource estimates
D. Organizational policies
Answer: A
Process - Task 9 - Integrate Planning
Choice A is the correct answer. The classification of organization, such as corporation, partnership, Limited Liability Company (LLC), or sole proprietorship, is irrelevant during project planning. Organizational classification is different from organizational structure, such as Functional, Weak Matrix, Project-Oriented, etc. Estimating tools & techniques and Activity Resource Estimates are both utilized in developing the overall Project Management Plan. Organizational policies are Organizational Process Assets and are also considered during planning.
In which of the following processes would it be most helpful for you as a project manager to employ data gathering techniques?
A. Develop Project Charter and Estimate Costs
B. Define Scope and Define Activities
C. Collect Requirements and Identify Risk
D. Create WBS and Control Scope
Answer: C
Process - Task 9 - Integrate Planning
Collecting requirements and identifying risk both rely heavily on information gathering techniques. In both processes, it is important to extract as much information as possible (to ensure that all necessary requirements are captured, and to ensure all potential risks are identified).
Your project selection committee is considering four projects. Project A’s NPV is positive, it has an ERR of 14%, and the payback period is 21 months. Project B’s NPV is negative, it has an ERR of 9%, and the payback period is 16 months. Project C’s NPV is positive, it has an ERR of 16%, and the payback period is 18 months. Project D’s NPV is negative, with an ERR of 16%, and the payback period is 13 months. Which project should you choose?
A. Project A
B. Project B
C. Project C
D. Project D
Answer: C
Process - Task 9 - Integrate Planning
Payback period is the least precise of all cash flow calculations, so you shouldn’t give this a lot of consideration if NPV is positive and ERR is greater than 0. Since Project B and Project D both have negative NPV, they shouldn’t be chosen. Project C has a higher IRR value than Project A and should be the project you choose.
In an effort to better select projects that will do more than return financial benefits sooner to the organization, executives are pushing project managers and business analysts to ensure stakeholders define project scope that supports rapid growth and operational efficiency within various departments throughout the company. To help achieve this goal, the corporate project selection committee wants to employ linear programming. Linear programming is an example of which project selection method?
A. Cost-benefit analysis
B. Constrained optimization methods
C. Benefit measurement methods
D. Comparative approach
Answer: B
Process - Task 9 - Integrate Planning
Choice B is correct. Constrained optimization methods are complex mathematical formulas and algorithms that are used to predict the success of a project. Choices C and D are the same – another term for benefit measurement methods is comparative approach. Choice A, cost-benefit analysis (sometimes written as benefit/cost analysis) is a type of benefit measurement method.
A project manager begins to prepare the project management plan after receiving the project charter. There is currently no historical information in the project management office (PMO). What is the next step the project manager should take in this scenario?
A. Utilize analogous estimating.
B. Seek advice from experts in the field.
C. Organize an initial kick-off call.
D. Request that the project sponsor provides input.
Answer: B
Process - Task 9 - Integrate Planning
If there is no historical information available, then consulting with subject matter experts is the next best thing a project manager can do to prepare the project plan. PMBOK Guide Sixth Edition (2017) PMI/PMI/4.2.2.1 Expert Judgement/p85
As an experienced project manager, the department heads in your company have asked for your input on how to make effective project selections for the coming year. You personally have used several cash flow methods to determine alternative ways of performing your current project and want to impart your lessons learned to the directors. You know which of the following is true regarding the results of your cash flow analysis?
A. Payback period and IRR will generally give you the same accept/reject decision.
B. NPV and discounted cash flows will generally give you the same accept/reject decision.
C. Payback period and discounted cash flows will generally give you the same accept/reject decision.
D. NPV and IRR will generally give you the same accept/reject decision.
Answer: D
Process - Task 9 - Integrate Planning
NPV and IRR will generally bring you to the same accept/reject decision. If either of them are positive it means the project will make enough money to out-pace the cost of capital.
You have four possible projects but can only choose one. Project A is being done over a six-year period and has a net present value (NPV) of $70,000. Project B is being done over a three-year period and has an NPV of $30,000. Project C is being done over a ten-year period and has an NPV of $40,000. Project D is being done over a one-year period and has an NPV of negative $160,000. To know which project to choose, you want to ensure you understand all involved selection methods. What is definition of present value?
A. Value of assets that a company owns
B. Today’s value of future cash flows
C. Future value of money on hand today
D. Current value of today’s assets adjusted for inflation
Answer: B
Process - Task 9 - Integrate Planning
Present Value is today’s value of future cash flows. Generally calculated using the formula PV = FV / [1+i] ^n, where FV = Future value, i = rate of interest, and n = number of years (^ signifies an exponent). Net Present Value is the cumulative sum of PV.
Your team has gathered to help you determine the relative sizes of new user stories. The product owner describes a user story to the team and the team in turn discusses the user story and ask questions of the product owner as needed. Once a common understanding has been achieved each team member privately selects one card to represent his or her estimate. Each team member is holding a deck of cards with values of 0, 1, 2, 3, 5, 8, 13, 20, 40, and 100. The value of each card represents the number of stories points the team member estimates for that particular piece of work. All cards are then revealed at the same time. What is this estimating technique called?
A. Delphi Technique
B. Planing Poker
C. Iteration Based Point Value Estimating
D. Nominal Group Technique
Answer: B
Process - Task 9 - Integrate Planning
Planning poker is a group estimating technique used to determine the relative sizing/complexity of user stories and or features. Delphi technique and nominal group technique are close and you could make the argument that this is a variant of the Delphi technique but Planning Poker is the more definitively correct answer.
You are managing a complex agile project using the Scrum methodology to add multiple features to a tax software product. Multiple features are needed due to all of the tax code changes which were recently enacted by the government for the upcoming tax year, which is only a few weeks away. Due to the externally imposed constrained end date of the project, you will have multiple teams working on several components concurrently. What technique should you use to integrate the software delivery from the various teams?
A. Configuration Management System
B. Scrum of Scrums
C. Project Management Information System
D. Sprint Backlog
Answer: B
Process - Task 9 - Integrate Planning
Scrum of Scrums is a technique to operate Scrum at scale for multiple teams working on the same product, coordinating discussions of progress on their interdependencies, and focusing on how to integrate the delivery of software, especially in areas of overlap. A configuration management system would be used to track versions of product features and functions, but does not integrate delivery of software. A PMIS would help track the tasks of the teams, but doesn’t integrate delivery. A Sprint or iteration backlog is the list of tasks that must be completed for each sprint, and does not integrate delivery.
You are a project manager for a large consulting firm. Your superior has just asked for your input on a decision about which project your company should pursue. Project A has an internal rate of return (IRR) of 12 percent. Project B has a predicted benefit cost ratio (BCR) of 2:5. Project C has an opportunity cost of $75,000. Project D has a payback period of six months. If you had to choose based on this data, which project would you select?
A. Project A
B. Project B
C. Project C
D. Project D
Answer: A
Process - Task 9 - Integrate Planning
This is a question about project selection and could easily be included in other sections of the exam as well. In order to interpret the information, you need to know what each item is. The benefit cost ratio for choice B is unfavorable, since it shows a large investment than return. There is not enough information provided to support recommending or not recommending choices C or D. This leaves only choice A with a 12 percent IRR, which is a factor weighing heavily in its favor.
The project selection committee is assessing the various project choices using the concept of net present value. If Project A has a net present value (NPV) of $42,000 and Project B has an NPV of $55,000, what is the opportunity cost if Project B is selected?
A. $13,000
B. $42,000
C. $97,000
D. $55,000
Answer: B
Process - Task 9 - Integrate Planning
The opportunity cost is the value of the project that was not selected (the lost opportunity).
You have been assigned as a project manager of large water and waste infrastructure project. You have had no major issues or set backs with the project and are operating within the Monitor and Control Project Work process. What is an input that will represent the status of the deliverables, corrective actions, and quality metrics?
A. Work performance data
B. Work performance information
C. Work performance reports
D. Enterprise environmental factors (EEF)
Answer: B
Process - Task 9 - Integrate Planning
A. work performance data is incorrect because it is an output of Direct and Manage Project work. B is the correct choice because work performance information includes lists of verified deliverables, status of quality metrics and corrective actions. C is incorrect because work performance reports are an output of this process. D. Is incorrect because EEFs are environmental factors that influence a project either favorably or negatively.
During the project selection process for a new power plant infrastructure development, Roger learns about a project selection method that utilizes scoring models and a cost analysis to determine what projects he should work on and develop over time. This type of project selection method is an example of which of the following?
A. Constrained optimization
B. Earned value
C. Standard deviation
D. Benefit measurement methods
Answer: D
Process - Task 9 - Integrate Planning
This illustrates the utilization of a cost-benefit analysis. Answer A is incorrect because constrained optimization is a mathematical approach that uses math models and highly complex criteria in the selection process. Answer B is incorrect because earned value is the value of the work actually performed and not a project selection method. Answer C is incorrect because standard deviation evaluation is not a project selection method, although some of the standard deviation reports may be inputs to the project selection process.
Your team, the Product Owner and you are planning your release. You realize there are many corporate policies and external regulations that you need to ensure compliance of as you work through the various sprints. Where would you document how the team will work together to manage resources, decisions, timing and other plans?
A. Compliance Management Plan
B. Scope Statement
C. Agile Project Plan
D. Project Charter
Answer: C
Process - Task 9 - Integrate Planning
Notice the initial part of the scenario about compliance is irrelevant to the question and is in fact a distractor. The last sentence is the key as well as the fact that this is an Agile project. These will be documented in the Agile Project Plan. The Project Charter authorizes the project to start. This is a classic bait and switch question. PMI Authorized PMP Exam Prep Student Guide/ Page 117
You are measuring the quality of a product against an ISO 9000 standard that applies to the product. What is this activity called?
A. Benchmarking
B. Root cause analysis
C. Inspection
D. Pareto Analysis
Answer: A
Process - Task 9 - Integrate Planning
Benchmarking involves comparing actual or planned project practices to those of comparable projects, industry standards, etc., to identify best practices, generate ideas for improvement and provide a basis for measuring performance.
What should a finished project management plan include?
A. Project Baselines (Schedule Baseline, Cost Performance Baseline and Scope Baseline) and all subsidiary plans
B. Scope statement, cost estimates, historical information, WBS, project charter, and schedule
C. Scope statement, cost estimates, organizational policies, WBS, project charter, the project management approach, and schedule
D. Scope statement, cost estimates, organizational policies, WBS, project charter, and schedule
Answer: A
Process - Task 9 - Integrate Planning
The project management plan integrates and consolidates all of the subsidiary management plans and baselines from the planning process. It documents the actions necessary to define, prepare, integrate and coordinate all subsidiary plans.
You’ve identified two alternative methods of implementing a project. Alternative A’s initial investment equals $596,000. The PV of the expected cash inflows is $299,000 in year 1 and $301,000 in year 2. The cost of capital is 14 percent. Alternative B’s initial investment equals $625,000. The PV of Alternative B’s expected cash inflows is $321,000 in year 1 and $301,000 in year 2. The cost of capital is 10 percent.
A. Alternative A will earn a return of at least 14 percent.
B. Alternative A will earn a return of at least 25 percent.
C. The return is not known for either Alternative A or Alternative B.
D. Both alternatives are equally viable choices.
Answer: A
Process - Task 9 - Integrate Planning
Since the Present Value of both alternatives is already given, you add up the PV of year 1 and year 2 in both alternatives, subtract their respective initial investments, and then you have their Net PV’s. Since NPV is positive for project A, that makes answer choice A a true statement. An NPV equal to zero would result in a 14% return, and thus, Project A must earn a return greater than 14%
You are the project manager at a consulting firm. Your projects work with state and federal government entities and focus on health care. Changes are common in certain types of projects, especially when they involve new technology. Project modifications should be reflected in which of the following?
A. Project management plan
B. Control quality results
C. Lessons learned register
D. Audit results
Answer: A
Process - Task 9 - Integrate Planning
The project management plan should continually be updated to reflect modifications to the project. Answers B, C, and D are incorrect because they are not documents that would be used to reflect project modifications.
You are a new project manager at Eat Right Food Stores. You have heard that your sponsor is difficult and the previous project manager was reassigned. You want to make a great initial impression with your first project so you want to ensure that you get off on the right foot. Which of the following processes is a part of the Initiating Process Group?
A. Identify Stakeholders
B. Select Project
C. Plan Stakeholder Management
D. Acquire project team
Answer: A
Process - Task 9 - Integrate Planning
Choice A is the correct answer. Initiating Process Group consists of processes that facilitate the formal authorization to start a new project or a project phase. Project Charter is developed to formally authorize a project or a project phase. Development of preliminary project scope statement provides high level scope description and is also a part of the Initiating Process Group. Choices B, C, and D present parts of the Planning Process Group and are therefore incorrect.
You have four possible projects but can only choose one. Project A has a six-year payback period and has a net present value (NPV) of $70,000. Project B has a three-year payback period and has an NPV of $30,000. Project C has a ten-year payback period and has an NPV of $40,000. Project D has a one-year period and has a NPV of negative $160,000. To know which project to choose, you want to make sure you understand all involved selection methods. Which of the following is referred to as a payback period:
A. The number of periods required to recover the initial investment
B. The rate of return on the investment
C. The number of periods required to bring project cost back to the original budget, based on current performance
D. Loan re-payment schedule
Answer: A
Process - Task 9 - Integrate Planning
Payback Period in business and economics refers to the period of time required for the return on an investment to equal the amount of the original investment.
