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

ROI expresses the net benefit of an investment as a percentage of its cost, making it easy to compare the return against the original investment amount.

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 definite limitations (budget caps, fixed deadlines) while assumptions are conditions the team believes to be true but has not confirmed, and carry risk if wrong.

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

A benefits realization plan must define specific, measurable benefits, when they will be achieved, and who is accountable for delivering them to ensure benefits are actually tracked post-project.

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

IRR is the discount rate that makes the NPV of all cash flows from a project equal to zero, representing the project's expected rate of return.

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

PPM frameworks prioritize and select projects based on their strategic alignment, expected value, and the organization's capacity to execute them simultaneously.

(CPP) Certified Project Professional Practice Test

(CPP) Certified Project Professional Practice Test

CPP Project Initiation & Business Case Development 2