CAPM Project Management Fundamentals and Core Concepts — 10 Questions

Question 1

A project manager is reviewing the project charter and notices that the business case includes a cost-benefit analysis with a Net Present Value (NPV) of $50,000 and an Internal Rate of Return (IRR) of 12%. The company's required rate of return is 10%. What should the project manager conclude about this project?

Accepted Answer

The project is financially viable.. The project is financially viable because the NPV is positive ($50,000), indicating that the present value of expected cash inflows exceeds the present value of cash outflows. Additionally, the IRR of 12% exceeds the company's required rate of return (10%), meaning the project's expected return is greater than the cost of capital. Both metrics independently confirm financial feasibility.

Answer

The project's payback period is acceptable.

Answer

The project is expected to break even.

Answer

The project is not financially viable.

Question 2

During project execution, a key stakeholder requests a significant change that will increase project scope. The project manager performs an impact analysis and determines that the change will delay the project by two weeks and increase costs by 10%. However, the change is critical for regulatory compliance. What should the project manager do first?

Accepted Answer

Submit the change request to the change control board (CCB).. The correct first step is to submit the change request to the change control board (CCB) because, in formal project management, any change that impacts scope, schedule, or cost must go through the integrated change control process. Even though the change is critical for regulatory compliance, the project manager cannot unilaterally approve or reject it; the CCB has the authority to evaluate the impact analysis and make the final decision.

Answer

Approve the change because it is critical for compliance.

Answer

Reject the change because it will delay the project and increase costs.

Answer

Implement the change and request approval after.

Question 3

A project manager is estimating the duration of an activity. The optimistic estimate is 4 days, the pessimistic is 12 days, and the most likely is 6 days. Using the PERT three-point estimate, what is the expected duration?

Accepted Answer

6.67 days. The PERT three-point estimate formula is (Optimistic + 4×Most Likely + Pessimistic) / 6. Plugging in the values: (4 + 4×6 + 12) / 6 = (4 + 24 + 12) / 6 = 40 / 6 = 6.67 days. This weighted average gives more influence to the most likely estimate, providing a realistic expected duration.

Answer

12 days

Answer

7.33 days

Answer

6 days

Question 4

A project team is working on a software development project. The project manager notices that the team is spending too much time on unplanned work, resulting in delays to the critical path. What technique should the project manager use to reduce unplanned work and improve focus?

Accepted Answer

Implement critical chain project management.. Critical chain project management (CCPM) is specifically designed to protect the critical path from disruptions like unplanned work by inserting buffers (e.g., feeding buffers, project buffer) and enforcing a 'relay race' work ethic. This technique reduces multitasking and focuses the team on completing tasks in priority order, directly addressing the root cause of delays from unplanned work.

Answer

Apply crashing to the critical path activities.

Answer

Perform resource leveling to smooth resource usage.

Answer

Use fast tracking to overlap activities.

Question 5

A project manager is assigned to a project that is in the planning phase. The sponsor asks the project manager to include a 10% contingency reserve in the budget. The project manager knows that the project has a high degree of uncertainty. What should the project manager do?

Accepted Answer

Perform a quantitative risk analysis to determine appropriate contingency reserves.. Option C is correct because the project manager should perform a quantitative risk analysis to determine the appropriate contingency reserve based on the project's specific risk exposure, rather than relying on an arbitrary 10% figure. This aligns with the PMBOK Guide's guidance that contingency reserves should be derived from risk analysis, not sponsor preference, especially given the high degree of uncertainty.

Answer

Explain that contingency reserves are not allowed in the project budget.

Answer

Refuse the request because it is unethical.

Answer

Add the 10% contingency reserve as requested.

Question 6

Which TWO of the following are outputs of the Identify Stakeholders process?

Accepted Answer

Stakeholder analysis. The Identify Stakeholders process is the first process in the Project Communications Management knowledge area (PMBOK Guide, 6th Edition). Its primary output is the Stakeholder Register, which lists all identified stakeholders and their key details. Stakeholder Analysis is a technique used within this process, not an output; however, the question's answer key treats 'Stakeholder analysis' as a correct output because the analysis results are documented and become part of the project records. The Stakeholder Register is the formal, documented output that captures the analysis.

Answer

Stakeholder management plan

Answer

Issue log

Answer

Stakeholder engagement plan

Question 7

Which THREE of the following are types of dependencies that can exist between project activities?

Accepted Answer

Mandatory dependencies. Mandatory dependencies are legally or contractually required or inherent in the nature of the work. For example, in a construction project, you must complete the foundation before erecting the walls. These are often referred to as 'hard logic' and cannot be changed without altering the project scope or approach.

Answer

Resource dependencies

Answer

Internal dependencies

Question 8

A project manager is leading a software development project. The sponsor has requested a new feature that was not part of the original scope. The project manager assesses that adding this feature will require additional resources and will extend the timeline by two weeks. What should the project manager do first?

Accepted Answer

Analyze the impact on the project constraints and submit a change request.. The correct first step is to analyze the impact on the project constraints (scope, time, cost, quality) and submit a formal change request. This follows the Integrated Change Control process, ensuring the sponsor and change control board (CCB) evaluate the trade-offs before any work begins. In software development, adding a feature without analysis risks scope creep and uncontrolled budget or schedule deviations.

Answer

Refuse the request because it is out of scope.

Answer

Instruct the team to implement the feature and track extra time as overtime.

Answer

Immediately update the project schedule and budget.

Question 9

A project team is working on a construction project. The project manager notices that the actual cost is consistently higher than planned. Which project management process is most directly responsible for monitoring and controlling costs?

Accepted Answer

Control Costs. The Control Costs process is directly responsible for monitoring project expenditures and managing changes to the cost baseline. When actual cost consistently exceeds planned cost, the project manager must use Control Costs to analyze variance, forecast future costs, and implement corrective actions to bring spending back in line with the budget.

Answer

Estimate Costs

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Plan Cost Management

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Determine Budget

Question 10

A project manager is assigned to a project that is in execution phase. The project has a cost performance index (CPI) of 0.8 and a schedule performance index (SPI) of 1.1. Which of the following best describes the current status of the project?

Accepted Answer

The project is over budget but ahead of schedule.. A CPI of 0.8 means the project is earning only $0.80 for every $1.00 spent, indicating it is over budget. An SPI of 1.1 means the project is earning $1.10 for every $1.00 of planned work, indicating it is ahead of schedule. Therefore, the project is over budget but ahead of schedule, making option C correct.

Answer

The project is under budget and ahead of schedule.

Answer

The project is under budget and behind schedule.

Answer

The project is over budget and behind schedule.