Project and Financial Management Flashcards

A project's NPV is calculated as -$50,000. What should a project manager recommend?

Answer: Reject the project because it will destroy value

A negative NPV means the project's costs exceed its discounted future benefits, indicating it will destroy value and should generally not be pursued.

Which change control process step comes immediately after a change request is submitted?

Answer: Evaluating the impact of the proposed change

After submission, a change request must be analyzed for its potential impact on scope, cost, schedule, and quality before any decision is made.

What is the Schedule Performance Index (SPI) formula?

Answer: SPI = Earned Value / Planned Value

SPI = EV / PV; a value greater than 1.0 means the project is ahead of schedule, while less than 1.0 means behind schedule.

A project manager is using bottom-up estimating. Which characteristic best describes this approach?

Answer: Detailed estimate built by aggregating individual work package estimates

Bottom-up estimating develops detailed cost estimates for individual work packages that are then rolled up to produce a total project cost.

What is the primary goal of earned value management (EVM)?

Answer: To integrate scope, schedule, and cost measurements to assess project performance

EVM provides an objective measure of project performance by integrating scope, schedule, and cost baselines into a single framework.

Which project lifecycle approach is best suited for a project with well-defined, stable requirements?

Answer: Predictive (Waterfall)

Predictive (Waterfall) lifecycle is best when requirements are well-understood and unlikely to change, allowing upfront planning of the full project.

What is a project baseline used for?

Answer: Providing a reference point to measure and control project performance

A project baseline (scope, cost, schedule) is the approved plan used as a benchmark to compare actual performance and measure variance.