CPP Project Initiation & Business Case Development 1 — Questions and Answers
Question 1: Which document formally authorizes a project and grants the project manager authority to apply organizational resources?
- Project Management Plan
- Project Charter (Correct answer)
- Statement of Work
- Business Case
Correct answer: Project Charter
The Project Charter is the document that formally authorizes the existence of a project and gives the project manager authority to use organizational resources.
Question 2: A project manager is asked to evaluate whether a proposed project is worth pursuing. Which tool BEST supports this decision by comparing expected benefits to anticipated costs?
- Earned Value Analysis
- Cost-Benefit Analysis (Correct answer)
- Monte Carlo Simulation
- Critical Path Method
Correct answer: Cost-Benefit Analysis
Cost-Benefit Analysis compares the financial and non-financial benefits of a project against its projected costs to determine if the investment is justified.
Question 3: During project initiation, a business case is developed. Which of the following is MOST important to include in a comprehensive business case?
- Detailed work breakdown structure
- Justification, expected benefits, and alignment to organizational strategy (Correct answer)
- Complete risk register with mitigation plans
- Resource assignment matrix
Correct answer: Justification, expected benefits, and alignment to organizational strategy
A business case must justify the project investment by articulating the problem or opportunity, expected benefits, and how the project aligns with organizational strategy.
Question 4: An organization uses Net Present Value (NPV) to select between competing projects. If Project A has an NPV of $450,000 and Project B has an NPV of $320,000, which should be selected and why?
- Project B, because lower NPV means lower risk
- Project A, because higher NPV indicates greater value creation (Correct answer)
- Project B, because it likely has a shorter payback period
- Neither; NPV alone is insufficient for project selection
Correct answer: Project A, because higher NPV indicates greater value creation
A higher NPV indicates a project is expected to generate more value in today's dollars, making Project A the better financial choice.
Question 5: Which type of feasibility study focuses on whether the organization has the technical expertise, equipment, and infrastructure to deliver the proposed project?
- Financial feasibility
- Operational feasibility
- Technical feasibility (Correct answer)
- Legal feasibility
Correct answer: Technical feasibility
Technical feasibility assesses whether the organization possesses or can acquire the technology, skills, and infrastructure needed to complete the project successfully.
Question 6: A needs assessment is conducted before project initiation. What is the PRIMARY purpose of a needs assessment?
- To assign resources to the project
- To identify and validate the underlying problem or opportunity the project will address (Correct answer)
- To develop the project schedule baseline
- To define the project's quality standards
Correct answer: To identify and validate the underlying problem or opportunity the project will address
A needs assessment identifies the root cause of a business problem or opportunity, ensuring the project addresses the right issue before resources are committed.
Question 7: During project initiation, high-level risks and assumptions are documented. What is the MAIN reason assumptions are captured in the initiation phase?
- To satisfy audit requirements
- To define the project's communications plan
- To identify factors that could affect project viability if they prove false (Correct answer)
- To assign risk owners across the project team
Correct answer: To identify factors that could affect project viability if they prove false
Assumptions captured during initiation represent conditions believed to be true; if they prove false, they can significantly impact project scope, cost, or feasibility.
CPP Project Initiation & Business Case Development 1
Which document formally authorizes a project and grants the project manager authority to apply organizational resources?