CPP Project Initiation & Business Case Development 2

Question 1

An executive sponsor wants to know the expected return on a $500,000 project investment. Which financial metric expresses the return as a percentage of the original investment?

Accepted Answer

Return on Investment (ROI)

Answer

Net Present Value (NPV)

Answer

Internal Rate of Return (IRR)

Answer

Payback Period

Question 2

What distinguishes a project constraint from a project assumption during the initiation phase?

Accepted Answer

Constraints are known limiting factors; assumptions are believed-to-be-true conditions not yet verified

Answer

Constraints are identified after planning; assumptions are identified before

Answer

Constraints only apply to budget; assumptions only apply to schedule

Answer

Constraints are external; assumptions are always internal

Question 3

A project sponsor is preparing a benefits realization plan. Which element is MOST critical to include?

Accepted Answer

Measurable benefit metrics, timing of realization, and responsible owners

Answer

Detailed task assignments for each team member

Answer

A full risk register with probability and impact scores

Answer

The project's work breakdown structure

Question 4

Which project selection method calculates the discount rate at which the present value of future cash flows equals the initial investment?

Accepted Answer

Internal Rate of Return (IRR)

Answer

Net Present Value

Answer

Payback Period

Answer

Cost-Benefit Ratio

Question 5

A project manager is initiating a project under a PMO that uses a project portfolio management (PPM) framework. What is the PRIMARY role of the PPM framework during initiation?

Accepted Answer

To ensure proposed projects align with organizational strategy and resource capacity

Answer

To assign project managers to projects based on skill

Answer

To define the technical architecture for each project

Answer

To establish individual project budgets independently

Question 6

During initiation, who is PRIMARILY responsible for developing the business case for a proposed project?

Accepted Answer

The project sponsor or requesting business unit

Answer

The project manager

Answer

The project team

Answer

The PMO director

Question 7

A feasibility study concludes a project is financially viable but operationally infeasible. What should the project sponsor do NEXT?

Accepted Answer

Investigate whether operational barriers can be resolved or the approach modified before committing

Answer

Proceed with the project and address operational issues during execution

Answer

Abandon the project immediately without further review

Answer

Escalate to the portfolio board for immediate approval