PM Test Center

What is the name of the document that formally authorizes a project?

A. Project management plan
B. Requirements documentation
C. Project charter
D. Project scope statement

Answer: C. Project charter
According to the PMBOK®, Develop Project Charter is the process of developing a document that formally authorizes a project or a phase and documenting initial requirements that satisfy stakeholder needs and expectations.

During the project selection stage, you learn that the value of Project A is $100,000 and the value of Project B is $75,000. Ultimately, Project A was chosen. As a result, the opportunity cost of that decision is:

A. $100,000
B. $75,000
C. $25,000
D. $175,000

Answer: B. $75,000
The opportunity cost is simply the value of the project not chosen. There is no math involved.

The main output of the Identify Stakeholders process is:

A. Performance report
B. Stakeholder register
C. Project charter
D. Communications management plan

Answer: B. Stakeholder register
The stakeholder register contains all the details regarding project stakeholders. It is used as an input for other communication processes.

Which tool and technique is used throughout the entire Integration process group?

A. Project charter
B. Expert judgment
C. Project management plan
D. Organizational process assets

Answer: B. Expert judgment
Expert judgment is the only tool and technique that spans across every process in Integration. All other choices listed are inputs and/or outputs.

Types of stakeholder analysis models include all of following except:

A. Influence/satisfaction grid
B. Influence/impact grid
C. Power/interest grid
D. Power/influence grid

Answer: A. Influence/satisfaction grid
Common stakeholder analysis models are power/interest grid, power/influence grid, influence/impact grid, and salience mode.

Processes in the Initiating process group are:

A. Develop Project Charter, Identify Stakeholders
B. Develop Project Charter, Develop Preliminary Scope Statement
C. Develop Project Management Plan, Identify Stakeholders
D. Develop Project Management Plan, Plan Communications, Identify Stakeholders

Answer: A. Develop Project Charter, Identify Stakeholders
Develop Project Charter from the Integration knowledge area and Identify Stakeholders from the Communications knowledge area are the only two processes in the Initiation process group.

Your company is in the process of deciding whether to continue with Project A or terminate it and begin Project B instead. You have already invested 12 months and $100,000 on Project A. It will take another 24 months and $50,000 to complete it. Project B is actually a better solution since the end product will result in a greater long-term savings. However, it will take 18 months and $250,000 to complete. Additionally, all time and money spent on Project A already would be wasted. Which project should the company chose?

A. Project A because the company has already spent 12 months and $100,000
B. Project A because it is still more inexpensive than Project B
C. Project B because time and money spent on Project A is irrelevant to the decision
D. Project B because it can be completed in less time than Project A

Answer: C. Project B because time and money spent on Project A is irrelevant to the decision
When a decision is being made from a cost perspective, expended (or sunk) costs are ignored. The goal is to make the best decision regardless of what paths were taken prior to that point in time.