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PMP Questions from Mosaic


Today's, and this week's questions:

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Sunday:

The Project Sponsor and the Portfolio Manager are reviewing the business case for your project. Based on the cash-flow data below what is the payback period?
Year 1 Cash in = $Nil, Cash out = $450,000
Year 2 Cash in = $250,000, Cash out = $200,000
Year 3 Cash in = $450,000, Cash out = $50,000
Year 4 Cash in = $500,000, Cash out = $50,000
Year 5 Cash in = $300,000, Cash out = $50,000

A. $700,000.

B. 2 Years.

C. 3 Years.

D. $800,000.

Best Answer = C

The payback period is the number of years (or months) needed until the total cash inflows equal the total cash outflow. In this case the inflows and outflows balance at the end of year 3. The Lifecycle cost of the project over 5 years is $800,000, this is the total cost of the initial investment in the project plus the annual operating costs.

Reference: PMBOK® Guide 6th Edition 1.2.6.4

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Saturday:

The primary difference between an Arrow Diagramming Method (ADM) network and a Precedence Diagramming Method (PDM) network is:

A. PDM is more accurate then ADM.

B. PDM networks use the CPM (critical path method), ADM networks do not.

C. PDM networks are developed from the WBS, ADM networks are not.

D. The way the network is drawn.

Best Answer = D

The only significant difference between an ADM network and a PDM network is the way they are drawn. PDM networks have the 'activity on the node' (usually a rectangular box), connected by arrows (called Links). ADM networks represent the activity by an arrow (activity on the Arrow) and the arrows join at the nodes. Both ADM and PDM networks use the deterministic Critical Path Method (CPM) methodology, and may be based on a WBS (or may not depending on how the information was developed). There is no difference in the accuracy of the calculations.

For more information see - http://www.mosaicprojects.com.au/PMKI-PBK-020.php

Reference: Practice Standard for Scheduling 2nd Edition 2.2.2.

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Friday:

The PMI Code of Ethics and Professional Conduct requires project managers to show a high regard for themselves, others and the resources entrusted to them. This is part of the _____________ requirements.

A. Honesty.

B. Responsibility.

C. Respect.

D. Fairness.

Best Answer = C

The four options are the key sections of the PMI Code. The requirement to show a high regard for yourself, others and the resources entrusted to you is part of the section on Respect for yourself and others.

Reference: PMI Code of Ethics and Professional Conduct, Section 3.1 - Respect.

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Thursday:

Your company has signed a legally enforceable agreement with another organisation to collaborate in the commercialisation of a new technology. The agreement sets out the obligations of the parties and defines the way development risks, costs and profits are to be shared; plus the specific roles and responsibilities of each organisation. Within this overall agreement, your project has been set up to develop a key aspect of the technology ready for its commercial launch. What is this agreement called?:

A. A Cost-reimbursable contract.

B. A boilerplate agreement.

C. A Fixed price contract.

D. A Teaming agreement.

Best Answer = D

From a legal perspective, there is no practical difference between a ‘binding agreement’ and a contract – the choice of words does not influence then underlying legal purpose! A Teaming Agreement is a legally binding contract between two or more organisations/entities to collaborate in an endeavour or business opportunity. The working relationship defined by the agreement may also be called a joint venture, a partnership, an alliance or some other arrangement or term selected by the parties. The agreement defines the roles and responsibilities of each of the parties including their buyer-seller roles. The agreement ends once the business opportunity ends (either successfully or when the parties determine it is no longer viable). ‘Boilerplate’ agreements are standard forms of contract used by an organisation (and usually not changeable). The other forms of contract have a one-way relationship between a buyer and seller rather than the collaborative approach expected in a teaming agreement.

Reference: PMBOK® Guide 6th Edition 12.1.1.6

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Wednesday:

Processes for assessing how capable a proposed supplier will be in complying with the statement of work, their capacity to meet delivery requirements and references from previous customers form part of the:

A. Contact.

B. Source selection criteria.

C. Contract negotiations.

D. Procurement planning.

Best Answer = B

The items listed in the question form part of the source selection criteria. These criteria are used during the conduct procurement process to select the best seller to do business with. While some elements of this list including understanding the suppliers capability and capacity may form part of the contract negotiations, the checking of references would happen before the selection of a seller to enter into negotiations with. Similarly, while developing selection criteria are part of the overall procurement planning processes the most specific, and therefore best, answer is the source selection criteria; capability, capacity and reference requirements are all potentially included in the criteria to be assessed in the selection of a preferred supplier for you to start negotiating with in the expectation of entering into a contract.

For more on applying the selection criteria see: https://www.mosaicprojects.com.au/WhitePapers/WP1062_Ranking-Requirements.pdf

Reference: PMBOK® Guide 6th Edition 12.1.3.5

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Tuesday:

Which project planning process involves developing options, and determining actions to enhance opportunities and reduce threats to project objectives?

A. Perform Qualitative Risk Analysis.

B. Plan Risk Responses.

C. Risk Identification.

D. Risk Register Development.

Best Answer = B

Plan risk responses process involves determining options and responses to identified risks. The decisions are incorporated into the updated risk register and modifications made to the project plan for actioning through changes to procurement and other project execution activities.

For more on risk management see: https://www.mosaicprojects.com.au/WhitePapers/WP1047_Risk_Management.pdf

Reference: PMBOK® Guide 6th Edition 11.5

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Monday:

You are distributing documents and data including bar charts, S-curves, histograms, analysed against the performance management baseline. What is the collective name for this information?

A. Performance data.

B. Status Updates.

C. Work performance reports.

D. Performance reports.

Best Answer = C

The information in combination is the project's 'work performance report'. Performance data (4.3.3.2) are inputs to the process. The PMBOK does not define the term 'performance reports'.

Reference: PMBOK® Guide 6th Edition 4.5.3.1

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