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Project and Financial Management Flashcards

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  1. Which financial concept discounts future cash flows to reflect the time value of money?

    Answer: Net Present Value (NPV)

    NPV discounts all future cash flows back to the present using a required rate of return, reflecting that money today is worth more than money in the future.

  2. A project sponsor requests acceleration of the project schedule. The project manager proposes adding more resources to critical path tasks. This is an example of:

    Answer: Schedule crashing

    Crashing adds resources (people, overtime, equipment) to critical path activities to shorten the schedule, typically at an increased cost.

  3. What is the difference between a project constraint and a project assumption?

    Answer: Constraints are known limiting factors; assumptions are considered true without proof

    Constraints are known restrictions (budget, time, resources), while assumptions are factors believed to be true but not yet confirmed.

  4. Which stakeholder analysis technique maps stakeholders based on their power and interest in the project?

    Answer: Power/Interest grid

    The Power/Interest grid categorizes stakeholders by their level of authority and concern for project outcomes to guide engagement strategies.

  5. What is the Internal Rate of Return (IRR)?

    Answer: The discount rate at which a project's NPV equals zero

    IRR is the discount rate that makes the net present value of all cash flows from a project equal to zero, used to compare project profitability.

  6. A project manager wants to execute two tasks simultaneously to shorten the schedule without adding resources. This technique is called:

    Answer: Fast tracking

    Fast tracking overlaps activities that would normally be done sequentially, compressing the schedule without additional cost but increasing risk.

  7. Which document formally records all identified project risks, their probability, impact, and planned responses?

    Answer: Risk register

    The risk register is the central document capturing identified risks, their analysis results, and assigned risk response strategies.