PK0-005 Project Management Concepts Practice Test 4 — 15 Questions

Question 1

A project sponsor is reviewing a project that has a Net Present Value (NPV) of -$15,000. What should the sponsor recommend?

Accepted Answer

Reject the project because NPV is negative. Net Present Value measures the difference between the present value of cash inflows and outflows; a negative NPV means the project is expected to destroy value at the required discount rate. The sponsor should therefore reject the project, since accepting a negative-NPV project would reduce shareholder value. NPV is the primary capital-budgeting criterion, so a negative result is a clear reject signal.

Answer

Proceed with the project because NPV is negative

Answer

Proceed if the IRR is positive

Answer

Reject only if the payback period is too long

Question 2

Which project life cycle phase involves obtaining formal acceptance of the project deliverables and releasing project resources?

Accepted Answer

Closing. The Closing phase is where the project is formally concluded. This includes obtaining formal acceptance of the final deliverables from the customer or sponsor, archiving project documents, releasing project resources (team members, equipment, etc.), and performing lessons learned. It is the only phase that encompasses these final wrap-up activities.

Answer

Executing

Answer

Planning

Answer

Monitoring and controlling

Question 3

A project manager is managing a construction project. The scope is well-defined, but the customer is open to minor changes during execution. Which methodology is most suitable?

Accepted Answer

Hybrid. A hybrid methodology combines predictive planning for the well-defined scope with agile flexibility for minor changes during execution, making it ideal for construction projects where the overall plan is fixed but the customer may request small adjustments. This balances the need for upfront planning with adaptability.

Answer

Predictive

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Kanban

Answer

Agile

Question 4

During project execution, a key stakeholder requests a new feature that was not in the original scope. The project manager is concerned about the impact on the schedule and budget. This is an example of:

Accepted Answer

Scope creep. Scope creep is the uncontrolled expansion of project scope — adding features or requirements without going through formal change control, which directly threatens schedule and budget baselines. Because the stakeholder made an informal request outside the original scope and the PM is worried about impacts, this is the textbook definition of scope creep.

Answer

Risk management

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Gold plating

Answer

Change control

Question 5

A project has a cost performance index (CPI) of 0.8 and a schedule performance index (SPI) of 1.1. What does this indicate?

Accepted Answer

Over budget and ahead of schedule. CPI is calculated as EV/AC; a value of 0.8 means the project is getting only 80 cents of earned value for every dollar spent, indicating it is over budget. SPI is EV/PV; a value of 1.1 means the project is ahead of schedule because it has earned 110% of the value planned for this point. Therefore the project is over budget and ahead of schedule.

Answer

Under budget and behind schedule

Answer

Over budget and behind schedule

Answer

Under budget and ahead of schedule

Question 6

Who is responsible for providing the project with resources and removing obstacles that are beyond the project manager's control?

Accepted Answer

Project sponsor. The project sponsor is the senior executive who champions the project at the organizational level and is accountable for securing the resources (budget, people, facilities) and for escalating and resolving issues that exceed the project manager's authority. In CompTIA Project+ terms, the sponsor owns the business case and provides the organizational clout needed to remove roadblocks outside the project's direct control. The project manager manages day-to-day execution but cannot typically override functional managers or executive-level constraints without sponsor support.

Answer

Project manager

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Project team

Answer

Steering committee

Question 7

Which TWO of the following are characteristics of a project? (Select TWO).

Accepted Answer

Produces a unique product or service. Option B is correct because, by definition in PMBOK-style project management, a project is undertaken to create a unique product, service, or result — the deliverable has not been produced in exactly the same way before. Option C is correct because a project is temporary in nature: it has a definite beginning and a definite end, which is reached when its objectives are achieved, when they cannot be met, or when the need no longer exists. Options A and E describe ongoing operations rather than projects, since operations are repetitive and sustain the business indefinitely. Option D is incorrect because a predictive (waterfall) methodology is merely one possible approach to managing a project; projects can equally use agile, hybrid, or iterative methodologies, so it is not a defining characteristic.

Answer

Produces the same result each time

Answer

Uses a predictive methodology

Answer

Ongoing and repetitive

Question 8

A project manager is selecting a project using financial methods. Which THREE of the following are valid project selection methods? (Select THREE).

Accepted Answer

Net Present Value (NPV). Net Present Value (NPV) is a valid financial project selection method because it discounts all future cash flows to present value and selects projects with a positive NPV, directly measuring profitability in today's dollars. Internal Rate of Return (IRR) is also valid, as it calculates the discount rate at which a project's NPV equals zero, allowing comparison of a project's expected return against the organization's required rate of return or cost of capital. Payback period is a valid financial selection method too, since it measures how long it takes for cumulative cash inflows to recover the initial investment, helping rank projects by liquidity and risk exposure. By contrast, a Work Breakdown Structure (WBS) is a scope decomposition deliverable, not a financial selection technique, and a scope statement documents project boundaries and deliverables rather than evaluating financial viability, so neither belongs among financial project selection methods.

Answer

Work Breakdown Structure (WBS)

Answer

Scope statement

Question 9

Which TWO of the following are examples of project constraints? (Select TWO).

Accepted Answer

Cost. Cost (A) is a classic project constraint because it defines the approved budget within which the project must deliver, and any change to funding directly limits what the project can accomplish. Scope (E) is also a core constraint because it specifies exactly what work and deliverables are included, and expanding or reducing it affects time, cost, and resources. Together with time (the third leg of the triple constraint), cost and scope form the fundamental boundaries that project managers must balance. The other options do not belong: project manager experience (B) is a competency or resource attribute, team morale (C) is a team/people factor, and customer satisfaction (D) is an outcome or success measure rather than a defined constraint.

Answer

Project manager experience

Answer

Team morale

Answer

Customer satisfaction

Question 10

A project is defined as a temporary endeavor undertaken to create a unique product, service, or result. Which of the following BEST describes a key characteristic of a project?

Accepted Answer

It has a defined start and end date.. A project is defined as a temporary endeavor with a definite beginning and end, undertaken to create a unique product, service, or result. The defined start and end date is the hallmark of its temporary nature, distinguishing it from ongoing operations. This characteristic ensures resources are released and the endeavor does not continue indefinitely.

Answer

It produces the same result every time.

Answer

It is part of a larger program.

Answer

It is an ongoing operation with repetitive tasks.

Question 11

A company is initiating a project to develop a new mobile application. The project manager needs to secure approval and funding. Which project role is primarily responsible for providing the necessary resources and championing the project?

Accepted Answer

Project sponsor. The project sponsor is the executive champion who provides resources and supports the project.

Answer

Project team member

Answer

Project manager

Answer

Steering committee

Question 12

A project manager is leading a software development project in a matrix organization. The project manager shares resources with functional managers. In this type of organizational structure, which of the following BEST describes the project manager's authority?

Accepted Answer

Limited authority, sharing resources with functional managers. In a matrix structure, authority is shared between functional and project managers; the project manager typically has limited authority compared to a projectized organization.

Answer

No authority; the functional manager has all authority

Answer

Full authority over the project team

Answer

Authority only over project budget, not personnel

Question 13

A project is in the planning phase and the team is determining the sequence of activities. Which project life cycle phase follows planning?

Accepted Answer

Executing. In the standard project life cycle (initiating, planning, executing, monitoring and controlling, closing), the phase that follows planning is executing, where the project work is performed to produce deliverables. Monitoring and controlling runs concurrently but is not the sequential next phase after planning.

Answer

Closing

Answer

Initiating

Answer

Monitoring and controlling

Question 14

A project manager is evaluating two potential projects. Project A has an NPV of $50,000, while Project B has an NPV of -$10,000. Which project should the organization select based solely on NPV?

Accepted Answer

Project A. Project A has a positive NPV of $50,000, meaning its discounted future cash flows exceed the initial investment and it adds value. Project B has a negative NPV of -$10,000, meaning it destroys value. Based solely on NPV, the organization should select Project A because positive NPV projects increase shareholder wealth.

Answer

Both projects

Answer

Project B

Answer

Neither project

Question 15

A project team is using an agile methodology to develop a new feature. The product owner frequently reprioritizes the backlog based on changing customer needs. Which characteristic of agile does this BEST illustrate?

Accepted Answer

Iterative development and adaptability. Agile methodologies emphasize iterative development and adaptability to changing requirements. The product owner reprioritizing the backlog based on evolving customer needs directly illustrates this adaptability, allowing the team to respond quickly to new information and deliver the highest-value features first.

Answer

Detailed upfront planning

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Fixed scope

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Sequential phases