64 Free Online PMP Practice Exam On Project Initiation

Much closer to your perfection of project initiation understanding with 64 free online PMP practice exam on project initiation. This acclaimed PMP question bank for free showcases multiple choice quizlets accessibly formatted and pertinently presented. Indeed, its coverage solely features feasibility and requires you to grip such terms as critically assessing proposals, functional specification, SSM, rich picture analysis, to name a few. Dedicated to user friendliness, up to 64 questions are equally splitted into two pages and you can move on to the following page clicking ‘next’ button at the end of page 1. After crushing all of them, you can check out your answers and score by hitting the handy ‘submit’ at the bottom of the test. May your PMP exam a great success!

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64 Free Online PMP Practice Exam On Project Initiation - Page 1

A prudent approach is to *choose the highest* of : rate of interest on borrowed funds (bank); potential best rate earned when investing funds elsewhere; current return on investment (ROI) of the business.

Choosing Financing Cost
Financing Costs
Opportunity Cost
Social Factors

An *extension* of the net present value method that effectively *finds* the internal rate of return for the proposal that would yield a net present value close to *zero*. In this way, projects of all sizes can be compared equally via their internal rate of return which represents the return expected on the initial investment made.

Internal Rate of Return Method
Internal Rate of Return
Internal Rate of Return Method [Trial And Error]
Internal Rate of Return Method [Graphing]

the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.

Net Present Value
Value Engineering
Return on Investment (ROI)
Figure of Merit (FOM)

Is it already in use ? Is it still actively in development ? Is it only an emerging technology ? Is it reliable and applicable ? Do we have expert/experienced people to evaluate the technology appropriately ? Can we get expert opinion from elsewhere ? (platform holder, consultant)

Technical Constraints
Technical Feasibility Factors
Technological Maturity Questions
Financial Feasibility Questions

Day-to-day revenue expenses that apply to the *organisation generally and not the proposal specifically*. E.g. rent, taxes, staff salary (including general management), electricity, stationery. *Depreciation* on administrative offices, machinery or furniture.

ETHICS
Overheads
Scenario
Subsidy

Affect refers to the influence that a change has on *something else*. Effect refers to the process of causing a change or to the result of that change. "The effect of the bomb was a huge explosion, wiping out buildings which affected those living in the city". You can have 'an effect' (noun) that describes the result of change (ie. the explosion). However, the noun 'an affect' refers to a part of the process of an organisms *reaction to stimuli* (e.g. liking something).

Social Factors
To Affect, To Effect
Feature
Cash Flow Statement

Finance already available in the business; finance borrowed (bank); additional capital invested by shareholders; grants (governments, foundations, businesses); subsidies (government); donations (individuals, companies); tax income (if it is a state funded organisation).

Investment Fund Sources
Net Present Value
Revenue Costs
Social Factors

The value of a product is the mental estimation a consumer makes of it; Value = Benefits / Cost.

Scenario
Value (Marketing)
Uncertainty
Value Engineering

Size means increased complexity and greater risk; Technological maturity means an increase to risk if tech or methods are new or untested; Structural complexity increases risk as part of both product component arrangement and the arrangement of the project team and stakeholders themselves.

Risk Phenomena
Risk
Financing Costs
Risk Dimensions

Factors that may concern customers or shareholders due to the potential harm to the environment. Alternatively they may be demanded by legislation. These need to be considered over the *longest possible time period, including disposal*.

Functional Specification
Internal Rate of Return
Environmental / Ecological Factors
Social Factors

Specify its value in *money or desirability*; Whether it is capital or revenue; When it occurs (timing); recurrence (one-off cost/benefit ?); constant or varying cost over time (e.g. inflation); Variations expected and by how much.

Cost-Benefit Analysis
Cost-Benefit Item Properties
Investment Fund Sources
Feasibility as a project

Identifying, specifying and *evaluating costs for its entire lifetime* - including purchase, construction, maintenance, repair, running costs (energy, rent), decommissioning; Identifying, specifying and *evaluating the benefits of the proposal over its projected lifetime*.

Cost-Benefit Item Properties
Long-Term Benefit Risks
Cost-Benefit Analysis
Features Analysis

Although *value calculating methods* result in precise figures, this in itself can be misleading as they are informed guesses. Better to give a rounded figure to better represent the idea that it is an estimate.

Project Profits & Round Figures
Time & Value
Net Present Value (procedure)
Net Present Value

Can't be easily translated into financial terms. Could be represented numerically by a FOM (Figure of Merit) for comparison or not at all, such as employee morale, organisational reputation.

Cash Flow Statement
Intangibles (Costs/Benefits)
Financing Costs
Human Risk Categories

A holistic (describing the situation as a whole) technique used to identify *problem areas* in a project as part of feasibility by *visualising* every *factor* involved in a project and their *inter-relationships*, including those in the PESTLE categories.

Rich Picture Analysis
Applying Features Analysis
Risk Phenomena
Risk Dimensions

Due to the substantial amount of work involved in evaluating (financially and technically) whether a proposal is worth pursuing further it may be treated as a separate project with its own team.

Feature
Feasibility as a project
Capital Costs
Opportunity Cost

A discounting formula used to calculate the net *present value* of *all* the *inflows and outflows* over the *duration* of a project (*including the initial investment - year 0*) using a *required rate of return*. In short, it takes the initial investment (*a negative value*) and adds it to the sum of the present values of each *net cash flow* for each year of the project. Ultimately, if the present value is *greater than zero* then the proposal can be considered.

Net Present Value
Value (Marketing)
Net Present Value (procedure)
Cash Flow Table Structure

Techniques that calculate a *common base value* to *compare proposals* that takes *all* of a proposals future cash inflows and outflows into account. This helps us directly compare proposals with *different durations* and *cash flow rates*. Includes *net present value* and *internal rate of return* methods.

Cash Flow Interval
Cash Flow Statement
Discounted Cash Flow Methods
Internal Rate of Return

Environmental Impact Assessment - Includes consideration of a project on energy needs, impact of infrastructure (roads etc.) and noise/water/air pollution.

Feature
EIA
ETHICS
Risk

A state where too little is known about something and that lack of knowledge represents a danger that can only be addressed by gethering more information.

EIA
Novel Risks
Uncertainty
ETHICS

Increasing possibility of business problems; greater likelihood that assets become less reliable and need replacing; marketing factors may change significantly; risk and uncertainty upset forecasts.

Figure of Merit (FOM)
Cost-Benefit Analysis
Long-Term Benefit Risks
Novel Risks

Approach to dealing with feasibility information beyond the *hard* quantifiable financial and technical aspects such as the Political, Social and Environmental in PESTLE. Uses techniques such as *rich picture analysis*.

SSM (Soft Systems Methodology)
Cash Flow Statement
Return on Investment (ROI)
Payback Period Method

A *brief* description of a system, process or *set of procedures* that should meet the identified objectives, ideas potentially generated by *brainstorming*. There can be multiple scenarios that may meet the same objectives. E.g. objective : to arrange holiday in Italy for summer. scenario 1 : use an agent. scenario 2 : use Expedia.

Utility
Feature
Scenario
Subsidy

A commonly used method due to its simplicity but : ignores benefits received after payback period; It ignores profitability or return on investment; doesn't take decommissioning costs into account; if financing costs aren't included, ignores time value of money; if short payback periods preferred - longer-term more profitable proposals will be ignored. In conclusion, although the payback method is tempting to keep a company in the black), it should be used with other methods.

Features Analysis
Investment Fund Sources
Payback Method Disadvantages
Depreciation Costs

Biological, Climate, Geological, Extra-terrestrial.

Social Factors
Features Analysis
Novel Risks
Natural Risk Categories

To be considered as part of a technical feasibility study and will include any constraints introduced by law (e.g. parking requirements, opening hours, health and safety) and those introduced by the requirements of the project (e.g needs to run at 30fps).

Revenue Costs
Technical Constraints
Uncertainty
Financing Costs

If the project is *novel* then there is a risk of cost variations/escalations (of 10 to 200 times !). This includes projects involving greater elements of research, development and immature technologies.

Novel Risks
ETHICS
Utility
Risk

A subsidy is an assistance paid to a business or economic sector.

Subsidy
Risk
Discounting
Scenario

Represents the chance of adverse consequences or loss occurring. Has a probability (chance) and impact (consequences), the magnitude of both quantify its importance.

Risk
EIA
Subsidy
ETHICS

Maturity, Utility, Usability, *Disruption during installation/construction*, Infrastructure requirements/changes, general social utility (general publics satisfaction), marketability (general publics needs / acceptance).

Technical Constraints
Financial Feasibility Questions
Technological Maturity Questions
Technical Feasibility Factors

The IRR is found by calculating NPV for the proposal with *progressively higher discounting rates* until the NPV is close to zero. E.g. you might start with a very low discount rate that would give a large NPV, increase the discount rates until the NPV is negative, then take the last positive value or try an IRR somewhere in-between to try and get close to zero.

Internal Rate of Return Method [Trial And Error]
Internal Rate of Return Method [Graphing]
Internal Rate of Return
Internal Rate of Return Method

The cost of using the money needed for capital and revenue costs not immediately covered by benefits (i.e. interest percentage rate). The rate of financing will obviously affect project profitability and the rate itself will vary depending on where the funds come from.

Depreciation Costs
Financing Costs
Revenue Costs
Capital Costs

64 Free Online PMP Practice Exam On Project Initiation

64 Free Online PMP Practice Exam On Project Initiation - Page 1

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