Exam Question

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%

 

 

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