Question1
The ratio of discounted benefit streams divided by discounted cost streams is commonly called:
Question 1 answers
a. Profitability index
b. NPV index factor
c. IRR index factor
d. Buss’s discounting and rank-ordering technique
ANSWER: b
Question 2 text Question 2 1 points Save
Zero based budgeting looks at last year’s expenditures as the basis of computing this year’s budget.
Question 2 answers
True
False
ANSWER: FALSE
Zero based budget Start each budget period afresh and not based on historical data
Question 3 text Question 3 1 points Save
An assessment of high impact project requirements finds that the following requirements have varying beneficial impacts (indicated by percentage figure in parentheses). The Pareto Rule suggests which requirements should be addressed first?
Requirements and their corresponding beneficial impacts: A (2%), B (50%), C (2%), D(5%), E(10%), F(1%), G (30%), H (1%), I (2%), J(2%)
Question 3 answers
a. A, C, F, H, I, J
b. B, G
c. B, G, E
d. A, B, E
ANSWER: b
Also known as 80/20 theory says that 80% of the impact is made by 20% of causes. B (50%) and G (30%) combined 80% so the answer is (b)
The 80/20 Rule means that in any set of things (workers, customers, etc.) a few (20 percent) are vital and many (80 percent) are considered trivial.

Question 4 text Question 4 1 points Save
Indirect costs should not be computed when trying to determine the cost of a project effort.
Question 4 answers
True
False
ANSWER: True
Question 5 text Question 5 1 points Save
A budget variance of -10% for expenditures during the month of April shows that a project is:
Question 5 answers
a. losing money
b. will face a cost overrun at its conclusion
c. is still on target
d. We don’t have enough information to determine budget status
ANSWER: b
Cost overrun refers to a situation in which a project incurs expenses in excess…