Here is an example of a question that has appeared on the PMP certification exam test. Just bear in mind that not all the questions are in this format. To get a better idea of the type of questions are on the exam, we recommend that you take a prep test to familiarize yourself to the questions.
- A company has to make a choice between 2 projects due to limited money and resources to do both project at the same time. Each project will take nine months and would cost $250,000.00
- The first project is a process optimization which would result in a cost reduction of $120k a 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:
Year 1: $15k
Year 2: $125k
Year 3: $220k
Assumed is a discount rate of five percent a year. Looking at the present values of the benefits of these projects in the first three years, what is true:
A. Both projects are equally attractive
B. The first project is more attractive by @ 7%
C. The second project is more attractive by @ 5%
D. The first project is more attractive by @ 3%