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Test Notes: A company has to make a choice between two projects, because the available resources in money and kind are not sufficient to run both at the same time. Each project would take 9 months and would cost $250,000. The first project is a process optimization which would result in a cost reduction of $120,000 per year. This benefit would be achieved immediately after the end of the project. The second project would be the development of a new product which could produce the following net profits after the end of the project: 1 year: $ 15,000 2 year: $ 125,000 3 year: $ 220,000 Assumed is a discount rate of 5 % per year. Looking at the present values of these projects revenues in the first 3 years, what is true? Both projects are equally attractive. The first project is more attractive by app.7%. The second project is more attractive by app.5%. The first project is more attractive by app.3%. Answer: D Which process is applied to break down the project into smaller, more manageable elements? Scope Planning. Activity Duration Estimating. Scope Definition. Scope Verification. Answer: C Which of the following is the output of Source Selection? Proposals. Evaluation criteria. Contract negotiation. Contract. Answer: D Where is the result node (outcome) shown on a typical Ishikawa or Fishbone diagram? Top. Bottom. Right hand side. Center. Answer: C What are workarounds in project management? Workarounds are essentially the same as rework. Workarounds are alternative strategies. Workarounds are unplanned responses to emerging risks that were previously unidentified or accepted. Workarounds are activities performed according to applicable contingency plans Answer: C What are fait accompli? A French dinner after a kick-off meeting. Unachievable deliverables. Accomplished objectives. Decisions made earlier which limit the options for decision making. Answer: D Tools and Techniques of Risk Response Planning include Id