PK0-005 Project Management Concepts Practice Question
A project manager is reviewing the project selection methods for a new initiative. Which TWO of the following are financial project selection methods? (Choose two.)
⚠ Common exam trap
PK0-005 often tests the distinction between financial (quantitative) and non-financial (qualitative) selection methods — candidates mistakenly include expert judgment or SWOT because they are 'used in selection,' but they are not financial.
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
✓
Net Present Value (NPV)
Net Present Value (NPV) is a financial project selection method because it discounts all future cash inflows and outflows to present value using the organization's cost of capital, and a project with a positive NPV adds value and is generally selected. Internal Rate of Return (IRR) is also a financial selection method because it calculates the discount rate at which a project's NPV equals zero, and projects whose IRR exceeds the required rate of return (hurdle rate) are acceptable. These two are quantitative, cash-flow-based capital budgeting techniques, unlike the remaining options. SWOT analysis is a strategic planning tool for assessing strengths, weaknesses, opportunities, and threats, not a financial metric. Expert judgment is a qualitative decision-making input drawn from experienced stakeholders, and requirements gathering is a scope/elicitation activity, so neither is a financial selection method.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
SWOT analysis
Why it's wrong here
SWOT analysis assesses internal strengths and weaknesses against external opportunities and threats, producing no monetary figures such as ROI, NPV or payback period. It is tempting because it is a recognised project selection technique, but it belongs to the strategic, non-financial category, where it would be the right tool for comparing alignment with organisational capability.
- ✗
Expert judgment
Why it's wrong here
Expert judgment draws on specialist experience and opinion rather than calculating monetary returns, so it cannot rank initiatives by ROI, NPV or payback period. It is tempting because it is a legitimate selection input, and it would be the correct choice when scoring qualitative criteria such as regulatory risk or technical feasibility that resist financial quantification.
- ✓
Net Present Value (NPV)
Why this is correct
NPV discounts future cash flows to present value, giving a monetary figure for comparing initiatives. The stem asks for financial selection methods, and NPV satisfies that by quantifying profitability in currency terms, unlike scoring models or benefit measurement approaches that rank projects non-financially.
- ✓
Internal Rate of Return (IRR)
Why this is correct
IRR calculates the discount rate at which a project's net present value equals zero, expressing return as a percentage. The stem requires financial selection methods, and IRR meets this by evaluating profitability numerically, letting organisations compare candidate initiatives against a required hurdle rate.
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Requirements gathering
Why it's wrong here
Requirements gathering is a scope and elicitation technique, producing no monetary figures for comparing candidate projects. It is tempting because it precedes selection and shapes the business case, and it would be correct when defining what a chosen project must deliver, not when ranking projects financially.
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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.