PM-PL3

Question 1

involves a multifaceted approach that incorporates various techniques and components

Answer 1

project selection in portfolio management

Question 2

ensures that projects are aligned with organizational goals and objectives

Answer 2

strategic alignment analysis

Question 3

evaluates the financial viability and potential returns of projects

Answer 3

financial analysis

Question 4

helps identify, analyze, and mitigate risks associated with projects

Answer 4

risk assessment

Question 5

evaluates the organization’s ability to allocate resources effectively

Answer 5

resource capacity analysis

Question 6

provide quantitative frameworks for prioritizing projects and maximizing overall portfolio value

Answer 6

benefit cost ratio (BCR)

Question 7

involves ensuring that proposed projects are in line with the organization’s strategic goals and objectives

Answer 7

strategic alignment analysis

Question 8

ensures reosurces are allocated to initiatives that drive the organization forward than detracting from its core mission

Answer 8

strategic alignment analysis

Question 9

Stakeholders at all levels of the organization need to be involved in the strategic
alignment analysis to ensure broad buy-in and support for selected projects

Answer 9

alignment across stakeholders

Question 10

what are the stratgies under strategic alignment analysis

Answer 10

balancing short-term and long-term goals, alignment across stakeholders, continuous monitoring

Question 11

involves evaluating the financial viability and potential returns of proposed projects

Answer 11

financial analysis

Question 12

calculates the present value of future cash flows generated by a project considering the time value of money.

Answer 12

net present value

Question 13

this indicates that the project is expected to generate value for the organization

Answer 13

positive NPV

Question 14

represents the discount rate at whicch the net present value of cash flows from a project equals zero

Answer 14

Internal rate of return (IRR)

Question 15

True or false: projects with higher IRRs are generally more desirable as they offer higher returns relative to the investment

Answer 15

True

Question 16

indicates the time it takes for a project to recoup its initial investment

Answer 16

payback period

Question 17

projects with ___ payback periods are preferred as they offer quicker returns on investment

Answer 17

shorter

Question 18

what technique can be used to assess the range of potential outcomes

Answer 18

monte carlo simulation

Question 19

proposed projects should fit within the organization’s budget constraints and financial capacity. this helps prioritize projects based on their potential returns and resource requirements

Answer 19

alignment with budget

Question 20

what should be considered under financial analysis

Answer 20

net present value, internal rate of return (irr), payback period, sensitivity analysis, risk-adjusted reutrns, cost-benefit analysis, alignment with budget

Question 21

involves identifying, analyzing and mitigating risks associated with proposed projects

Answer 21

risk assessment

Question 22

Risks can arise from various sources, including technical complexity, market
volatility, regulatory changes, and resource constraints. A thorough risk identification
process ensures that all potential risks are considered

Answer 22

identification of risks

Question 23

Risks are assessed qualitatively by their impact and likelihood of occurrence and
quantitatively by estimating their potential financial and operational impacts on the project.

Answer 23

qualitative and quantitative analysis of risk

Question 24

Once risks are identified and assessed, appropriate mitigation strategies are
developed to reduce their likelihood or impact. This may involve risk avoidance, risk
transfer, risk mitigation measures, or acceptance of certain risks

Answer 24

risk mitigation strategies

Question 25

Contingency plans are developed to address unforeseen events or risks that may arise during project execution. These plans outline alternative courses of action to minimize disruptions and maintain project progress.

Answer 25

contingency planning

Question 26

Risk management is an ongoing process that requires continuous monitoring and control throughout the project lifecycle. Risks should be regularly reviewed, and mitigation strategies adjusted as necessary to address changing circumstances

Answer 26

monitoring and control

Question 27

Effective communication of risks to stakeholders is essential for informed decision-making and proactive risk management. Regular reporting on risk status and mitigation efforts ensures transparency and accountability.

Answer 27

communication and reporting

Question 28

enumerate what should be considered in risk assessment

Answer 28

identification of risks, qualitative and quantitative analysis, risk mitigation strategies, contingency planning, monitoring and control, communciation and reporting

Question 29

True or False: Risk assessment should be integrated into project planning processes, including project scope, schedule, budget, and resource allocation. This ensures that risks are considered at every stage of project development and implementation

Answer 29

True

Question 30

After project completion, an assessment of risks encountered and mitigation strategies implemented provides valuable insights for future projects. Lessons learned are documented and incorporated into organizational risk management practices

Answer 30

lessons learned

Question 31

involves evaluating the organization's ability to allocate resources to proposed projects

Answer 31

resource capacity analysis

Question 32

resources required for project execution include financial resources, human resources, equipment, technoology and facilities.

Answer 32

resource identification

Question 33

Once resource requirements for proposed projects are identified, resource allocation decisions are made based on availability, priority, and strategic importance. Resource allocation should be balanced to avoid over-commitment or underutilization of resources

Answer 33

resource allocation

Question 34

Organizations may face constraints such as limited funding, skilled labor shortages, or competing priorities. Resource capacity analysis helps identify constraints and prioritize projects accordingly

Answer 34

resource constraints

Question 35

Resource capacity analysis aims to optimize resource utilization by aligning resource allocation with project priorities and strategic objectives. This involves balancing resource demand and supply across the organization.

Answer 35

resource optimizaation

Question 36

Resource capacity analysis considers various scenarios and contingencies that may impact resource availability, such as changes in project scope, resource constraints, or unexpected events. Scenario planning helps organizations prepare for different resource allocation scenarios.

Answer 36

scenario planning

Question 37

Resource capacity analysis requires collaboration across different departments and stakeholders to ensure that resource allocation decisions are aligned with organizational goals and objectives

Answer 37

cross-functional collaboration

Question 38

Resource capacity analysis is an iterative process that requires continuous monitoring and adjustment as project priorities, resource availability, and organizational needs evolve over time. Regular reviews ensure that resource allocation remains aligned with strategic objectives

Answer 38

monitoring and adjustment

Question 39

enumerate the considerations under resource capacity analysis

Answer 39

resource identification, resource allocation, resource constraints, resource optimization, scenario planning, cross-functional collaboration, monitoring and adjustment

Question 40

compares the total expected benefits of a project to its total expected costs

Answer 40

benefit cost ratio (bcr)

Question 41

calculation of BCR

Answer 41

BCR is calculated by dividing the total benefits of a project by its total costs. A BCR greater than 1 indicates that the project's benefits outweigh its costs, making it financially viable.

Question 42

BCR analysis should consider both tangible and intangible benefits of a project, such as increased market share, enhanced brand reputation, or improved customer satisfaction. Intangible benefits may be more challenging to quantify but are essential for comprehensive project evaluation.

Answer 42

consideration of intangible benefits

Question 43

BCR analysis typically discounts future benefits and costs to account for the time value of money. Discounting adjusts future cash flows to their present value, reflecting the opportunity cost of investing capital in the project.

Answer 43

discounting future benefits and costs

Question 44

True or false: BCR allows for the comparison of different projects based on their cost effectiveness. Projects with higher BCRs offer greater value relative to their costs and are generally preferred over projects with lower BCRs.

Answer 44

true

Question 45

True or false: Sensitivity analysis evaluates how changes in key variables, such as project costs, benefits, or discount rates, impact the BCR.

Answer 45

true

Question 46

True or false: Risk-adjusted BCR provides a more accurate assessment of project viability in uncertain environments

Answer 46

true

Question 47

true or false: Projects with higher BCRs that contribute to strategic priorities are given priority in project selection

Answer 47

true

Question 48

true or false: Projects with positive long-term BCRs create value for the organization over time, contributing to its overall success and competitiveness

Answer 48

true

Question 49

these involve establishing criteria and assigning weights to different project attributes to prioritize projects

Answer 49

scoring models

Question 50

involves assessing the potential benefits foregone by choosing one proejct over another or by not pursuing a project at all

Answer 50

opportunity cost analysis

Question 51

represents the value of the next best alternative that is sacrificed when a decision is made. the benefits that could have been obtained by investing resources in alternative projects or activities

Answer 51

opportunity cost

Question 52

enumerate the 7 techniques in project selection in portfolio management

Answer 52

1. strategic alignment analysis 2. financial analysis 3. risk assessment 4. resource capacity analysis 5. benefit cost ratio (bcr) 6. scoring models 7. opportunity cost analysis

Question 53

a fundamental tool for evaluating the financial performance and profitability of investments

Answer 53

return on investment analyssi

Question 54

Considering the investment cost, returns, calculation period, risks, and other factors, organizations can make informed decisions, allocate resources effectively, and drive sustainable growth and profitability.

Answer 54

return on investment analysis

Question 55

involves assessing the potential revenue generated by the investment. includes income from sales, services, or other revenue streams associated with the project

Answer 55

financial returns (gain)

Question 56

roi analysis considers the cost-saving opportunities resulting from the investment. this could include reductions in operational costs, overhead expenses, or efficiencies gained through process improvements

Answer 56

cost savings

Question 57

The upfront costs associated with implementing the project, including capital expenditures, equipment purchases, software licenses, and implementation fees

Answer 57

investment costs (expense)

Question 58

This component includes recurring costs such as maintenance, operational expenses, employee salaries, and other expenditures required to sustain the investment over time.

Answer 58

ongoing expenses

Question 59

ROI analysis considers the timeframe over which returns are expected to be realized. Short-term and long-term ROI projections may vary depending on the nature of the investment and its associated payback period

Answer 59

timeframe

Question 60

Future returns are discounted to their present value to account for the time value of money. This ensures that future cash flows are adjusted for inflation and opportunity costs

Answer 60

time value of money

Question 61

ROI analysis incorporates risk assessment to account for uncertainties and potential setbacks associated with the investment. It evaluates the probability and impact of various risks on the expected returns

Answer 61

risk assessment

Question 62

Measures to mitigate risks and uncertainties are considered in ROI analysis. This may include contingency plans, insurance coverage, diversification strategies, or contractual agreements to minimize potential losses

Answer 62

risk mitigation strategies

Question 63

ROI analysis evaluates the strategic alignment of the investment with organizational goals and objectives. It considers how the investment contributes to the organization's mission, vision, and long-term strategy.

Answer 63

qualitative factors

Question 64

Qualitative factors such as market demand, competitive landscape, and industry trends are assessed to gauge the potential for success and market acceptance of the investment.

Answer 64

market opportunity

Question 65

ROI analysis considers the impact of the investment on various stakeholders, including employees, customers, suppliers, and communities. It evaluates how the investment aligns with stakeholder interests and expectations

Answer 65

stakeholder impact

Question 66

calculation of ROI

Answer 66

ROI is calculated by dividing the total revenue total cost from the investment by the total investment cost and expressing the result as a percentage

Question 67

net gain of roi calculation

Answer 67

Net gain is calculated by subtracting the total investment cost from the total returns generated by the investment.

Question 68

ROI analysis may include specific performance metrics and KPIs to track the progress and success of the investment over time. These metrics may vary depending on the nature of the investment and the industry context

Answer 68

key performance indicators (KPI)

Question 69

Comparison with industry benchmarks and historical performance data helps assess the relative performance of the investment and identify areas for improvement

Answer 69

benchmarking

Question 70

ROI analysis establishes a minimum acceptable ROI threshold that the investment must meet to be considered financially viable. This threshold may vary depending on the organization's risk tolerance, investment objectives, and required rate of return

Answer 70

investment treshold

Question 71

enumerate the importance of ROI analysis

Answer 71

decision support, performance evaluation, resource allocation, risk management, strategic planning