PK0-005 Project Management Concepts Practice Question
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?
⚠ Common exam trap
PK0-005 often tests the misconception that a negative NPV project might still be selected for strategic reasons or that both projects should proceed; the question says 'based solely on NPV,' so only the positive-NPV project qualifies.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
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 analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Both projects
Why it's wrong here
NPV is a single-value decision metric: a positive NPV adds value and a negative one destroys it, so selecting both ignores that Project B's -$10,000 fails the accept/reject threshold. Selecting multiple projects applies when comparing a portfolio under capital rationing, where several positive-NPV candidates compete for a fixed budget.
- ✗
Project B
Why it's wrong here
A negative NPV of -$10,000 means the project's discounted cash inflows fall short of its outlay, destroying value, so it fails the accept criterion. Project B would be selected only if NPV were positive but smaller than a rival's, or if non-financial strategic factors overrode the financial metric.
- ✓
Project A
Why this is correct
NPV measures expected value in present-day currency; a positive figure means the project adds value, while a negative one destroys it. Project A's $50,000 exceeds Project B's -$10,000, so selecting A satisfies the stem's sole NPV criterion.
- ✗
Neither project
Why it's wrong here
Rejecting both discards Project A's positive $50,000 NPV, which exceeds the zero threshold and therefore adds value. Selecting neither is defensible only when every candidate returns a negative NPV, or when the projects are mutually exclusive and a superior alternative exists outside the two being compared.
About these practice questions
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official CompTIA exam blueprint
This PK0-005 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PK0-005 exam.