69 Free PMP Exam Questions Based On The Current PMP Test Version

69 free PMP exam questions based on the current PMP test version for your self assessment. They gather lots of attention as a result of their efficient format and adherence to the current version of PMP exam. Indeed, this powerful PMP sample test free with one best answer to each question is dedicated to giving you an idea of the pattern of questions that you may come across in the PMP real exam. After you’re done answering those quizlets, just hit submit at the end of the test to have your results checked and marked automatically. As the format and content are taken full care, this sample is highly recommended to PMP strivers as one of effective study and revision materials. So don’t miss it to increase your chances of burning PMP questions and passing this exam with flying colors.

Related test bank for you: 200 Free PMP Exam Questions Based On PMBOK 5th Edition

69 Free PMP Exam Questions Based On The Current PMP Test Version

What is not the purpose of configuration control when configuration management is applied in a project?

Verification that the configuration identification for a configuration item is accurate, complete, and will meet specified program needs.
Ensuring that proposed and approved changes to configuration items are fully analyzed.
Ensuring that proposed and approved changes to configuration items are fully documented.
Managing and controlling the frequently requested changes to a project by applying agreed rules.

You are the project manager in an engineering project and have recently signed a contract with a software vendor for the development of a complicated control solution. The software will be used to control machinery equipment which your project team is currently developing. The contract is a lump-sum contract. The contractor has target cost estimated which seem rather low to you. Which of the following statements is not true for this situation?

It is the contractor's risk in this type of contract that their profit may vanish if costs have been underestimated.
This form of contract should only be chosen when all the requirements for the building of the product are well-known by all parties involved.
In a fixed-price contract, change requests can cause issues regarding additional time and extra costs for the changes to be applied.
It is likely that your organization may have to assume any unexpected additional costs for the software development.

Which of the following is generally not regarded to be a motivator according to Frederick Herzberg?

Working conditions and interpersonal relations
Responsibility for enlarged task
Interest in the task
Recognition for achievement

Which is an appropriate order in most project situations for the development of scope-related documents?

1. Project SOW (statement of work), 2. Project charter, 3. Project scope management plan, 4. Project scope statement, 5. WBS (work breakdown structure) and WBS dictionary.
1. Work breakdown structure, 2. Scope statement, 3. Project charter, 4. CSOW (contractual statement of work), 5. Contractual work breakdown structure
1. Feasibility study, 3. Contract, 4. CWBS (contractual work breakdown structure), 5. Scope of work descriptions, 6. PID (project initiation document).
1. BOM (Bill of materials), 2. CAP (control account plan), 3. Project charter, 4. Change management plan, 5. Scope baseline.

A project management team wants to procure some customized products which are available in identical grade and quality from many vendors. What should be included in the procurement package to ensure that their offers will be comparable?

A statement of work describing the needs of the project in sufficient detail to enable vendors to make suitable proposals
A statement of work specifying attributes and metrics of the requested deliverables in detail to allow vendors submission of bids
The approved project scope statement, the WBS which should be broken down to work package level and the WBS dictionary
The risk management plan and the reports from those risk management reviews which have been made so far

With your team you are using judgment from subject matter experts to identify and analyze project risks. There is a small number of experts available, but some of them have long been in a teacher-student or manager-assistant relationship. Which of the following techniques can ensure best that there is no dominating opinion during an expert review?

Peer review
SWOT analysis
Delphi technique
Monetary value calculation

The scope baseline consists of what?

Scope statement, WBS, and WBS dictionary
Cost baseline, quality baseline and schedule baseline
Configuration management plan and configuration identification document
Procurement statement of work and project scope statement

What is the meaning of a concept called the "Journey to Abilene"?

Project managers should visit their customers far more often than what is usual in order to avoid misunderstandings and bad emotions.
International projects may have an increased need for traveling which can lead to additional costs and troubles with time zones.
Committee decisions can have the paradox outcome, that a jointly made or approved decision is not desired by any individual group member.
A project is a temporary endeavor undertaken to create a unique product, service or result. Repeating it would be similar to making the same journey twice.

An estimation has been made that the construction of a residential home will cost a certain amount per square foot of living area. This is an example of what type of estimating?

Analogous estimating
Bottom-up estimating
Top-down estimating
Parametric estimating

A project manager has been asked to support an internal project request by developing a business case. What kind of information is the person expected to provide in the document?

The detailed information from a business standpoint to determine whether bidding for the customer project will be successful.
The detailed information from a project management standpoint to determine whether the project will be successful.
The detailed information from a technical standpoint to determine whether the project will be successful.
The necessary information from a business standpoint to determine whether the project is worth the investment.

Liquidated damages (LDs) are contractually agreed payments in order to...

...give the contractor an incentive to meet an aggressive schedule or challenging quality objectives.
...penalize the contractor for late completion of a project or failure to meet specifications.
...cover the customer's costs caused by late completion or failure to meet specifications by the contractor.
...make a bid or proposal binding for the offerer while the customer has time to select among various bidders.

What should not be covered by a risk management plan?

Roles and responsibilities for handling project risks
Timing of project risk management activities
The methodological approach used for risk management
Individual risks and potential responses to them

Which of the following is true regarding the code of accounts?

It allows one to easily identify the breakdown level of the item in the resource structure.
It describes the coding structure used by the performing organization to report financial information in its general ledger.
It is the collection of unique identifiers generally assigned to WBS items.
It defines ethical behavior in the project and the responsibilities to the customer and the profession.

Network templates which contain only portions of a network are often referred to as

Sub-networks or fragment networks
Subprojects
Programs
WBS items

You have been assigned as a project manager to a software project. While you and your team are working on a WBS (work breakdown structure), estimations for activity durations based on the activity list vary significantly. Which additional documents may help you clarify this situation?

Milestone list and scope baseline.
Project schedule network diagrams and human resource plan.
Activity cost estimates and scope baseline.
Activity attributes and project scope statement.

A project sponsor requested earned value data on two concurrent projects from the project managers. Both projects are regarded as equally important and strategically beneficial and have been finished by over 80%. He received the following information: Project A: PV: $1,800,000; EV: $2,300,000; AC: $2,100,000. Project B: PV: $2,000,000; EV: $1,500,000; AC: $1,600,000. The sponsor considers to shift some resources from project A to project B to speed up the second project which is currently behind schedule. What is the most likely outcome of such a measure?

Changing team assignments during late course of a project typically increases cost efficiency.
Changing team assignments during late course of a project typically increases time efficiency.
According to the law of diminishing returns, the consolidated cost variance of the two projects will decrease.
According to the law of diminishing returns, the consolidated cost variance of the two projects will increase.

An output of the process Estimate activity resources is a document called "activity resource requirements". It identifies the types and quantities of resources...

...while the term resources is limited to equipment and materials.
...required for each activity in a work package.
...while the term resources is limited to human resources.
...to be obtained solely from the performing organization.

What is true for modern project management? Project managers need...

... to have a strict standing in negotiating
... to show experience in tricking business partners
... to be team players and facilitators instead of "bosses"
... to be strongly linked to local traditions

During execution of a project which is performed for a customer on a T&M (time and material) contract base, a new project manager is taking over the assignment. He discovers that two members assigned to the project have charged time without performing any work for the project customer. Upon further investigation, he determines that this occurred because there have been no other project assignments open for these employees. The customer is unaware of these facts. What should the project manager do?

Try to find some productive work for these staff members in the project and leave them on the team.
The best thing is to do nothing. The customer will not realize the problem anyway.
Try to find a responsible person for the over-assignment who can be made accountable.
Take the two people off the team immediately and arrange for the refund of the excess charges to the customer.

A change request in a project has been rejected some weeks ago. Yesterday, the project manager found out that it nevertheless has been implemented by the team members, who knew of the change request, but not of the rejection. In order to avoid such a situation, rejected change requests should be consistently communicated to stakeholders through which process?

Report performance
Verify scope
Perform integrated change control
Monitor and control risks

A production process has been defined as part of an industrial equipment manufacturing project. The process is intended to produce steel bolts with a length of 20 cm. The control limits are 19.955cm and 20.045cm. The measurements made at the end of the process yielded the following results: 20.033cm, 19.982cm, 19,995cm, 20.006cm, 19.970cm, 19.968cm, 19.963cm, 19.958cm, 19.962cm, 19.979cm, 19.959cm. What should be done?

The process is under control. It should not be adjusted.
A special cause should be investigated, the process should be adjusted.
The control limits should be adjusted.
The measuring equipment should be recalibrated.

What is a trigger in project risk management?

An expected situation causing an unidentified risk to occur
A warning sign that a previously identified risk might be occurring or has occurred
An unexpected situation causing an identified risk to occur
An unexpected situation causing an unidentified risk to occur

You are assigned as the project manager to a project which had a one-time cost variance in the past caused by unexpected rework which has meanwhile been finished. You perform earned value analysis and get the following results: EV: 250,000; PV: 200,000; AC 275,000. BAC is 500,000. What is right?

EAC = 550,000
EAC = 525,000
EAC = 500,000
EAC = 425,000

What is a constructive change?

A change request that helps improving the project and its product, service or result and is discussed generally in a friendly style.
A direction by the buyer or an action taken by the seller that the other party considers an undocumented change to the contract.
A field change or ad-hoc change mandated by the project customer in a public construction project.
A change request which will lead to the re-construction of an older version of the project performance baseline by the contractor.

Which tool and technique is used in the processes Create WBS and Define activities?

Nominal group technique
Human resource assignment
Brainstorming
Decomposition

Which of the following statements describes best the relationship of quality and grade?

Low grade is always a problem; low quality may be overcome by a good rework and repair process.
Grade is a category or rank given to entities having different functional requirements but the same need for quality.
Both quality and grade can often be improved through intelligent measuring, testing and examining.
Low quality is always a problem as it bears on the ability of an item to meet requirements; low grade may sometimes be acceptable.

What does the acronym RACI commonly stand for in project management?

Responsible, Accountable, to be Consulted, to be Informed
Remote, Attached, Connected, Integrated
Risk Analysis and Caution Initiative
Randomly Accessible Cashflow Information

Which statement on conflicts is true?

Conflict resolution should focus on people, not issues.
Conflict is natural and forces a search for alternatives.
Conflict should always be handled in private and not in the team.
Too much openness is a common cause of conflict.

You are the manager of your company's project management office. The company is running many concurrent projects; most of them share a resource pool of technical staff. Understanding how resources are utilized across projects has been found essential to overall project performance, including cost effectiveness and profitability. This morning you received a message that the resource pool members will be unable to perform as planned for the next months because the overall work load has grown too high and while delays are adding up, the morale of the staff is going down. What should you do next?

Ensure that quantitative information for all projects is made available in a uniform and reliable fashion and verify that the project management methodology is adhered to. Then consolidate the information to get an understanding of the problems related with the use of shared resources.
Implement an enterprise project management software solution which is able to level the human resources across the various projects and which has the capability to model resource assignment on a percentage level thus optimizing resource utilization for the overall organization.
Do nothing related to the described problem unless you are explicitly requested by the organizations upper management. Supporting decision making on the level on which project portfolio management is done, is not the project management office's business.
Evaluate project management software which supports planning and scheduling across enterprise-wide project portfolios. Avoid managing the availability of shared enterprise resources for the projects run by an organization because this is not the business of a project management office.

Which statement describes best the meaning of the term cost baseline?

A cost baseline is always created by translating time-phased cost information into cost data on activity or work-package level.
A cost baseline is an approved time-phased budget that will be used to measure and monitor cost performance on the project.
Data to draw a cost baseline can be easily generated and updated as necessary from information related to actual project cost.
A cost baseline is usually displayed in the form of an inverse S-curve drawn from the beginning of the project until data date.

When do bidder conferences normally take place?

After the contract has been awarded to keep alternatives open.
After submission of bid or proposal, but before contract award.
Prior to the submission of a bid or proposal by the bidder.
After technical meetings with bidders to discuss contract requirements.

You have recently been assigned as a project manager to a new B-O-T (build, operate, transfer) capital project. Reviewing the initial documentation you found out that it has been calculated with a very small margin during operations of its product for the shareholders. What should you do?

As you are not responsible for lifecycle costing, you don't have to worry about operation profits. Focus on project costs from initiation through handover.
Ensure maximum profits by buying the best and cheapest items, components and modules―potentially from a big number of different suppliers―and integrating them.
Create a realistic plan broken down to a sufficient level of detail. Perform all risk management processes. Ensure real-time communications with all stakeholders.
Try to get a second project manager assigned to share decision making and accountability to shareholders with the person.

A review to determine whether of project activities comply with organizational and project policies, processes, and procedures is commonly called

Quality auditing
Inspection
Quality testing
Reject screening

You want to perform active risk acceptance. What should you do?

Create contingency reserves in resources, money and time.
Develop a plan to minimize impact in case that an identified risk occurs.
Develop a plan to minimize the probability of occurrence for identified risks.
Make additional resources available to speed up the project.

You have been criticized that certain specifications in your scope statement do not pass the test for SMART objectives. What are SMART objectives?

Objectives specified in far more detail than necessary for a execution of a successful project.
Easily achievable objectives which help you reducing the pressure on yourself and the team.
Objectives that should be achieved in order to attain formal recognition by both the customer and the project sponsor.
Objectives that are described using specific, measurable, assignable, realistic and time-related specifications.

You are running a project for a customer based on a cost-reimbursable contract with the following terms: Target costs: $ 1,000,000. Fixed fee: $ 100,000. Benefit/cost sharing: 80% / 20%. Price ceiling: $ 1,200,000. Which is the PTA (= point of total assumption, break point) of the project?

$1,300,000
$1,500,000
$80,000
$1,125,000

You are performing earned value technique on your project. After budget approval, an additional and unexpected cost item has been identified, which made the project more expensive some weeks ago. The item has meanwhile been paid by the project team, and it is expected that for the remaining duration of the project, costs will be as budgeted. In this case, which is the best formula to calculate EaC (Estimate at Completion)?

EaC = BaC - CV
EaC = BaC / CPI
EaC = AC + BtC / CV
You can not compute the EaC.

Your project management team includes two external consultants each from a different company. You found that repeated conflicts between the two consultants already slow down project progress and jeopardize achievement of objectives. Which stage of team development can be difficult to overcome in such a situation?

Storming from Forming, Storming, Norming, Performing
Panic from Enthusiasm, Panic, Hope, Solution
Kickoff from Assignment, Kickoff, Training, Communicating
Frustration from Direction, Frustration, Cooperation, Collaboration

Which is normally not regarded as an element of cost of quality?

Prevention costs
Maintenance cost
Appraisal costs
Failure costs

What is true for prototypes?

Prototyping causes significant costs and should be avoided wherever possible.
They are tangible and allow for early feedback on requirements by stakeholders.
Prototypes are mostly developed toward the end of a design or build phase.
Prototypes increase the risk of misunderstandings between developers and users.

Which of the following statement(s) on whistleblowing is/are not true? a. It is a term used to define an employee’s decision to disclose information on unethical, immoral or illegal actions at work to an authority figure. b. An employee should always discuss the matter with people external to the company before following the "chain of command" and discuss it with the immediate superior. c. The consequences of whistleblowing are often extreme and might include being branded as an owner of bad judgment, layoff, civil action and imprisonment. d. Carefully performed whistleblowing can lead to the end of unethical business practices.

a
b
b, c
c, d

A project management team has subcontracted work to a service company. Which of the following tools is the best choice to assure that this company will be able to meet the quality requirements of the project?

Quality audit
Deliverable inspection
Fixed price contract
Service level agreement

A prime contractor in a customer project under CPFF contract has run into unexpected technical problems. Fixing them will require a lot of additional work to be done. The company made a decision to book more staff and equipment from their subcontractors in order to adhere to the agreed timeline. The customer agreed to this decision. What will most likely happen?

The contractor‘s indirect costs will increase and the customer‘s payment for them will increase, too.
The contractor‘s indirect costs will increase, but the customer‘s payment for them will not increase.
The contractor‘s indirect costs will not increase, but the customer‘s payment for them will.
Both the contractor's indirect costs and the customer‘s payment for them will not increase.

You found the following earned value analysis information for a project that was recently closed-out: SPI = 0.7, CPI = 1.0

The project has been cancelled while it was executed. At that time the project was behind schedule and on budget.
The project's deliverables have all been finished. The project came in behind schedule but on budget.
The project's deliverables have all been finished. The project came in ahead of schedule but on budget.
The project's deliverables have all been finished. The project came in on schedule but over budget.

You are performing a project management audit in your company and find that most of the project plans are neither consistent nor up-to-date. Which of the following statements is not true?

Projects should never be executed without a valid, updated and working project management plan.
The consistency of the project management plan is secondary because it is only the results that matter.
A great deal of effort is required to develop and update a project plan, but the benefits include less pressure on all stakeholders and a resulting product that will satisfy the requirements.
Poor planning and insufficient updating of project management plans are common reasons for cost and time overruns.

A project is handled by departments of an organization and expedited by a project coordinator. Which of the following statements is most likely to be true?

The performing organization is a weak matrix.
The performing organization is doing "management by projects".
The performing organization is a strong matrix.
The performing organization is projectized.

According to the project plan, a contractor is scheduled to deliver some software components today afternoon. A regular payment is due to be made to this contractor tomorrow. You and your project team received a note this morning informing you that the software delivery will be delayed by 2 weeks. What should you do right now?

You should delay the payment also for 2 weeks.
You must immediately find a different contractor.
You should conduct a meeting with the contractor to resolve the delivery issues before making the payment.
You should make the payment and reschedule the project plan.

During a project, earned value analysis is performed, resulting in the following numbers: EV: 523,000; PV: 623,000; AC: 643,000. Which results are correct?

CV: +120,000; SV: +100,000
CV: +100,000; SV: +120,000
CV: -100,000; SV: -120,000
CV: -120,000; SV: -100,000

Which of the following statements describes best the relationship between project phases and the project life cycle?

The project life cycle includes the time when the project is performed and the expected product lifespan after that.
In project management, the sequence of project phases and phase gates is often referred to as project life cycle.
The project life cycle is regarded as a sequence of project activities while phases are defined to control overlapping activities.
The project life cycle describes how iterations of project management processes are used when a project schedule is developed.

What is defined by control limits?

A measuring instrument solely used to describe process capability. The process is found capable if the ±3 sigma range is exceeded by not more than 0.3% of a tested sample lot.
The limits of the six sigma area on either side of a control chart to plot measured values; data found outside the area are out of specification and can lead to rejection of an entire batch.
The area consisting of typically three standard deviations on either side of a mean value of a control chart to plot measured values found in statistical quality control
The area consisting of typically three standard deviations on either side of a mean value of a control chart to plot measured values found in quality assurance

Which of the following statements is not true?

Attribute sampling is the process of assessing whether results conform to specifications or not.
Prevention means keeping errors out of the process by applying actions before the process starts changing its input.
Variables sampling means that the result is classified into one of the 3 categories: "acceptable" - "acceptable after rework" - "rejected".
Inspection is often mainly done to keep errors out of the hands of the customer instead of as a means of process control.

You are assigned as the project manager to a project which is executed for a customer under FP contract. Your customer informed you this morning that they insist on certain "refinements" of the project scope. You agree that the requested actions make really sense to the project, but believe that they constitute a major change increasing the project scope. What should you do next?

Accept the request of the customer. Diligently document the additional costs and working hours spent by yourself and the team on the implementation of the change and invoice these to the customer at appropriate rates.
Perform earned value analysis to assess the current status of the project and get all the numbers you need to communicate the case to the change control board which then will have to make the best decision regarding the customer request.
Check the contract, the project charter, the scope statement and other documents related to the project and the contract. Implement ADR (alternative dispute resolution) procedures if the conflict cannot be resolved otherwise.
Talk to the project sales department and find a joint solution with them how to best reject the request considering the commercial and strategic value of the customer to the organization you are working for.

Which statement describes best why you should document assumptions?

Assumptions might prove to be wrong. Knowing which assumptions were incorrect allows baseline adjustments in case of project crisis.
Assumption analysis is a valuable tool and technique to explore the validity of assumptions during risk identification.
Assumptions limit the project management team's options for decision making because they can not be controlled by the team.
In case of schedule or budget overruns, the documentation of assumptions supports a clear assignment of responsibility.

Your project is executed with a globally spread virtual team. The project progress has been found to be too slow. Which measure is most likely to immediately speed up the project?

Technical training for all team members
Daily phone conferences and detailed reporting
A team meeting at a location convenient to all team members
Collocation of team members at a suitable place

A project manager spent some days to create a multi-page document, which he called project charter. The document should have been issued by the project sponsor. The sponsor found the document outsized and asked for a condensed document. Which of the following is usually not an element of the project charter?

The authority level of the project manager
Detailed control account and work package descriptions
The business need that the project was undertaken to address
High-level risks

Which should be included in a requirements management plan?

The document should trace requirements to project scope / WBS deliverables.
It should describe how requirements activities will be planned, tracked, and reported.
It should trace high-level requirements to more detailed requirements.
It should trace requirements to business needs, opportunities, goals, and objectives.

You have been asked to calculate the internal rate of return (IRR) of a project? What will you assess?

The time period needed to pay back the investment from a project when future income is discounted.
The inherent discount rate or investment yield rate produced by the project's deliverables over a pre-defined period of time.
The rate of negative risk that can be accepted for a project without turning the expected net present value negative.
The expected benefit from a project’s deliverable calculated as a percentage of the original investment over a specified time period.

A document called ____________ is created by decomposing the project scope into smaller, more manageable elements.

Scope Statement
Network Logic Diagram
Work Breakdown Structure
Requested Change

You have used estimates made by your team members and applied the critical path method to compute a network logic diagram for your project. Then you found out that it cannot be sufficiently optimized for scarce resources and fast progress towards a given deadline. What should you do next?

Apply resource leveling heuristics to uncritical activities only.
Reduce estimates on duration and work efforts by an adequate percentage.
Apply Three-point estimation and critical chain project management.
Remove physical constraints and replace hard logic with soft logic.

You are project manager in a global project with a team consisting of people from various countries. What can you try to prevent misunderstandings due to cross-cultural differences?

Use all communication methods available that are suitable for the team and follow up in writing when communicating verbally. Remember that cultural and individual diversity may help project teams solving unforeseen problems during the course of the project.
When you are about to form a team for your project, keep in mind that some cultures are developed, others are more primitive. Some have values, some not. You should consequently avoid choosing members from countries with cultures that are not similar to your own.
Cultural dilemmas can prevent any project from being successful. They should therefore be smoothed or suppressed so as to make sure that they cannot disrupt project work. Your effort should concentrate on communication that can help reach that goal.
As norms regarding communication habits differ significantly across various cultures, communicating between people from different countries should only be done using language. The nonverbal dimension simply bears too many risks.

________ is typically not referred to as a buffer type in critical chain project management.

Resource buffer
Free buffer
Feeding buffer
Project buffer

Which is not true in regard of RoI (return on investment) for a project?

It defines the cumulated net income from an investment at a given point in time or during a defined period.
It includes investment, direct and indirect costs and may include allowances for capital cost, depreciation, risk of loss, and/or inflation.
It is most commonly stated as a percentage of the investment or as a dimensionless index figure.
It is the time when cumulated net income is equal to the investment.

A project management team is evaluating the causes that might contribute to unsatisfactory performance and quality. Which of the following statements is not true?

Normal process variation is attributable to random causes and sometimes also called "white noise".
Special causes are easier to predict and handle than random causes (also called common causes).
Special causes are unusual events which are difficult to foresee and often produce outliers.
A process can be optimized to limit the bandwidth of variations due to random causes.

Which of the following tools is used to create a risk management plan?

Risk planning meetings
Documentation reviews
Data precision rankings
Diagramming techniques

During a company event, you had the opportunity to talk to a colleague project manager. He told you that in his current project actual costs are 15% under cumulated costs budgeted for today. What do you think?

The information given to you by the colleague is not sufficient to assess project performance.
The project will probably be completed with total costs remaining under budget until the end.
A significant cost increase during the further course of the project will probably bring the costs back to baseline level.
Original cost forecasting and budgeting for the project must have been poor to allow this variance.

In order to speed up a project, you made a decision to fast-track a phase currently performed with five team members, and another one which was planned to begin in four weeks time with another five team members. Which of the following activities should you do first?

Make sure that all exit criteria of the consecutive phase have been met to ensure the flow of communications in a team situation which is more complex by a factor of 2.
Make sure that all entry criteria of the previous phase have been met by planning and performing a phase gate meeting to assess technical aptness.
Make sure that all exit criteria of the previous phase have been met by planning and performing a phase gate meeting to assess technical performance.
Restructure your team and delegate tasks in order to ensure the flow of communications in a team with the number of communication channels increased by a factor of 4.5.

Which of the following becomes increasingly important in a virtual team environment?

Requirements engineering
Communication planning
Formal procurements closure
Network diagramming

A company has to make a choice between two projects, because the available resources in money and kind are not sufficient to run both at the same time. Each project would take 9 months and would cost $250,000. The first project is a process optimization which would result in a cost reduction of $120,000 per year. This benefit would be achieved immediately after the end of the project. The second project would be the development of a new product which could produce the following net profits after the end of the project: 1. year: $ 15,000; 2. year: $ 125,000; 3. year: $ 220,000. Assumed is a discount rate of 5% per year. Looking at the present values of the benefits of these projects in the first 3 years, what is true?

Both projects are equally attractive.
The first project is more attractive by app. 7%.
The second project is more attractive by app. 5%.
The first project is more attractive by app. 3%.

In a traditionally drawn decision tree, a circle represents ___________.

a chance to which no expected monetary value can be assigned so that a likely pay-off can not be shown.
a decision to which no expected monetary value can be assigned so that a likely pay-off can not be shown.
a chance to which an expected monetary value may be assigned to calculate the most likely pay-off.
a decision to which an expected monetary value may be assigned to calculate the most likely pay-off.

69 Free PMP Exam Questions Based On The Current PMP Test Version