MIS573-Chapter4

Question 1

A Gantt chart is the same as a project management plan.

Answer 1

False (The project management plan is much more than a Gantt chart.)

Question 2

A project charter typically does not authorize the project manager to use organizational resources to complete the project.

Answer 2

False (A project charter is a document that formally recognizes the existence of a project and provides direction on the project’s objectives and management. It authorizes the project manager to use organizational resources to complete the project.)

Question 3

A project’s internal rate of return can be determined by finding what discount rate results in an NPV of what value for the project?

Answer 3

zero (You can determine a project’s internal rate of return (IRR) by finding what discount rate results in an NPV of zero for the project.)

Question 4

A summary of the planned approach for managing the project should describe stakeholder needs and expectations, important assumptions, and constraints.

Answer 4

True (A summary of the planned approach for managing the project should describe stakeholder needs and expectations, important assumptions, and constraints.)

Question 5

A SWOT analysis, being a linear process, cannot be performed using the nonlinear mind mapping technique.

Answer 5

False (Some people like to perform a SWOT analysis by using mind mapping, a technique that uses branches radiating from a core idea to structure thoughts and ideas.)

Question 6

An IT company revises its process parameters in response to complaints from vendors that products were not ready on time. Which is this an example of?

Answer 6

a corrective action (Corrective actions should result in improvements in project performance.)

Question 7

An organization should consider only projects with a negative NPV if financial value is a key criterion for project selection.

Answer 7

False (An organization should consider only projects with a positive NPV if financial value is a key criterion for project selection.)

Question 8

An organization’s information technology project selection process should guide the strategic plan.

Answer 8

False (Aligning IT projects with business strategy is consistently a top concern for CIOs. Most organizations face thousands of problems and opportunities for improvement. Therefore, an organization’s strategic plan should guide the IT project selection process.)

Question 9

As projects progress, the organization must reevaluate the need, funding, and will for each project to determine if the project should be continued, redefined, or terminated.

Answer 9

True (As projects progress, the organization must reevaluate the need, funding, and will for each project to determine if it should be continued, redefined, or terminated.)

Question 10

Change requests are always made in writing.

Answer 10

False (Change requests are common on projects and occur in many different forms. They can be oral or written, formal or informal.)

Question 11

Corrective actions reduce the probability of negative consequences associated with project risks, while preventive actions should result in improvements in project performance.

Answer 11

False (Corrective actions should result in improvements in project performance. Preventive actions reduce the probability of negative consequences associated with project risks.)

Question 12

In a weighted scoring model, what percent must the sum of the weights of all the criteria total?

Answer 12

100 (In a weighted scoring model, a weight is assigned to each criterion based on its importance to the project. Determining weights requires consultation and final agreement. You can assign weights based on percentages; the weights of the criteria must total 100 percent.)

Question 13

In project integration management, directing and managing project execution involves carrying out the project management plan by performing the activities included in it.

Answer 13

True (Directing and managing project work involves carrying out the project management plan by performing the activities included in it. The outputs of this process are deliverables, work performance information, change requests, project management plan updates, and project documents updates.)

Question 14

Information systems can help an organization support a strategy of being a low-cost producer.

Answer 14

True (Many information systems are classified as “strategic” because they directly support key business strategies. For example, information systems can help an organization support a strategy of being a low-cost producer.)

Question 15

It is necessary that IT project managers have prior technical experience in creating and managing IT products.

Answer 15

False (It is often helpful for IT project managers to have prior technical experience or at least a working knowledge of IT products.)

Question 16

Many projects fail because of unclear requirements and expectations, so starting with a payback analysis makes a lot of sense.

Answer 16

False (Many projects fail because of unclear requirements and expectations, so starting with a project charter makes a lot of sense.)

Question 17

NPV analysis is a method for making equal comparisons between cash flows for multi-year projects.

Answer 17

True (NPV analysis is a method for making equal comparisons between cash flows for multi-year projects.)

Question 18

Opportunities and directives are essentially the same thing.

Answer 18

False (Opportunities are chances to improve the organization. Directives are new requirements imposed by management, government, or some external influence.)

Question 19

Organizational process asset updates are an important output of the closing process of a project.

Answer 19

True (The project team should provide a list of project documentation, project closure documents, and historical information produced by the project in a useful format. This information is considered a process asset.)

Question 20

Payback period is the amount of time it will take to recoup, in the form of net cash inflows, the total dollars invested in a project.

Answer 20

True (Payback analysis is another important financial tool when selecting projects. Payback period is the amount of time it will take to recoup the total dollars invested in a project, in terms of net cash inflows.)

Question 21

Project integration management must occur just within the context of a particular project.

Answer 21

False (Project integration management must occur within the context of the entire organization, not just within a particular project. The project manager must integrate the work of the project with the ongoing operations of the organization.)

Question 22

Projects that address broad organizational needs are likely to fail.

Answer 22

False (Projects that address broad organizational needs are much more likely to be successful because they will be important to the organization.)

Question 23

Projects that arise as a result of problems and directives must be resolved quickly to avoid hurting an organization’s business.

Answer 23

True (It is often easier to get approval and funding for projects that address problems or directives because the organization must respond to these categories to avoid hurting their business.)

Question 24

Some organizations initiate projects using a contract in place of a project charter.

Answer 24

True (Instead of project charters, some organizations initiate projects using a simple letter of agreement, while others use much longer documents or formal contracts.)

Question 25

The number of interfaces in a single project is limited, and does not depend on the number of people involved in the project.

Answer 25

False (Project integration management includes interface management, which involves identifying and managing the points of interaction between various elements of a project. The number of interfaces can increase exponentially as the number of people involved in a project increases.)

Question 26

The organization should complete low-priority projects before high-priority ones, if the low-priority ones take less time.

Answer 26

False (Organizations can also categorize IT projects as having high, medium, or low priority based on the current business environment. An organization should always complete high-priority projects first, even if a low- or medium-priority project could be finished in less time.)

Question 27

The outputs of which process include change request status updates, project management plan updates, and project document updates?

Answer 27

monitoring and controlling (The outputs of the monitoring and controlling process include change request status updates, project management plan updates, and project document updates.)

Question 28

The ROI is always positive.

Answer 28

False (The ROI is always a percentage. It can be positive or negative.)

Question 29

What actions result in improvements in project performance?

Answer 29

Corrective (Corrective actions should result in improvements in project performance.)

Question 30

What are new requirements imposed by management, government, or some external influence referred to as?

Answer 30

Directives (Directives are new requirements imposed by management, government, or some external influence.)

Question 31

What document used to coordinate all project planning documents and help guide a project’s execution and control?

Answer 31

project management plan (A project management plan is a document used to coordinate all project planning documents and help guide a project’s execution and control.)

Question 32

What is the first step in determining the NPV?

Answer 32

determine the estimated costs and benefits for the life of the project and the products it produces (The first step in determining the NPV is to calculate the estimated costs and benefits for the life of the project and the products it creates.)

Question 33

What process involves identifying and controlling the functional and physical design characteristics of products and their support documentation, and ensures that the descriptions of the project’s products are correct and complete?

Answer 33

Configuration management (Configuration management ensures that the descriptions of the project’s products are correct and complete. It involves identifying and controlling the functional and physical design characteristics of products and their support documentation.)

Question 34

What statement is true regarding a return on investment or ROI?

Answer 34

It is always a percentage. (The ROI is always a percentage. It can be positive or negative.)

Question 35

What term is used for benefits minus costs?

Answer 35

cash flow (Cash flow is the benefits minus costs or income minus expenses.)

Question 36

What term is used for the minimum acceptable rate of return on an investment?

Answer 36

required rate of return (The required rate of return is the minimum acceptable rate of return on an investment.)

Question 37

What type of analysis involves calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time?

Answer 37

Net present value (Net present value (NPV) analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.)

Question 38

When does payback occur?

Answer 38

When the net cumulative benefits equal the net cumulative costs (Payback occurs when the net cumulative benefits equal the net cumulative costs, or when the net cumulative benefits minus costs equal zero.)

Question 39

Which document recognizes the existence of a project and provides direction on the project’s objectives and management?

Answer 39

project charter (A project charter is a document that formally recognizes the existence of a project and provides direction on the project’s objectives and management.)

Question 40

Which information is included in a business case?

Answer 40

project objective, high-level requirements, and time and cost goals (Many projects require a business case to justify their investment. Information in the business case, such as the project objective, high-level requirements, and time and cost goals, is included in the project charter.)

Question 41

Which is an example of an organizational process asset?

Answer 41

Management systems (Organizational process assets include formal and informal plans, policies, procedures, guidelines, information systems, financial systems, management systems, lessons learned, and historical information that can influence a project’s success.)

Question 42

Which process includes defining project scope, benefits, and constraints?

Answer 42

project planning (In the project planning stage of selecting information technology projects, organizations define project scope, benefits, and constraints.)

Question 43

Which process involves working with stakeholders to create the document that formally authorizes a project?

Answer 43

Developing the project charter (Developing the project charter involves working with stakeholders to create the document that formally authorizes a project —the charter.)

Question 44

Which section of the project management plan describes specific methodologies a project might use and explains how to document information?

Answer 44

technical processes (The technical processes section describes specific methodologies a project might use and explains how to document information.)

Question 45

Which section of the project management plan includes external interfaces, internal structure, as well as roles and responsibilities?

Answer 45

project organization (The project organization section of the project management plan includes external interfaces, internal structure, as well as roles and responsibilities.)

Question 46

Which section of the project management plan provides the planned cost of deliverables?

Answer 46

budget (The budget section of the plan provides the planned cost of the deliverables.)

Question 47

Which stage of information technology planning outlines business processes that are central to achieving strategic goals and helps determine which ones could most benefit from information technology?

Answer 47

business area analysis (The business area analysis outlines business processes that are central to achieving strategic goals and helps determine which processes could most benefit from IT.)

Question 48

Interface management involves identifying and managing the points of interaction between various elements of a project.

Answer 48

True (Interface management involves identifying and managing the points of interaction between various elements of a project.)

Question 49

What is the majority of time on a project is usually spent on?

Answer 49

Execution (The majority of time on a project is usually spent on execution, as is most of the project’s budget.)

Question 50

Which process is undertaken to reduce the probability of negative consequences associated with project risks?

Answer 50

Preventive actions (Preventive actions reduce the probability of negative consequences associated with project risks. The problem has not yet occurred. Measures are taken so that problems do not occur.)

Question 51

An annual discount factor is a multiplier for each year based on the discount rate and year.

Answer 51

True (The annual discount factor is a multiplier for each year based on the discount rate and year.)

Question 52

Which process involves selecting information technology projects and assigning resources?

Answer 52

resource allocation (In the resource allocation stage of selecting information technology projects, organizations select information technology projects.)

Question 53

What is the first step in the planning process?

Answer 53

tie the information technology strategic plan to the organization’s overall strategic plan (The first step in the planning process, starting at the top of the hierarchy, is to tie the IT strategic plan to the organization’s overall strategic plan.)

Question 54

Which term is used for a formal, documented process that describes when and how official project documents may be modified, the people authorized to make modifications, and the paperwork required for these changes?

Answer 54

change control system (A change control system is a formal, documented process that describes when and how official project documents may be changed. It also describes the people authorized to make changes, the paperwork required for these changes, and any automated or manual tracking systems the project will use.)

Question 55

Which network diagramming technique uses boxes to represent activities?

Answer 55

PDM (The precedence diagramming method (PDM) is a network diagramming technique in which boxes represent activities. It is particularly useful for visualizing certain types of time relationships.)

Question 56

Which technique involves network diagramming and is used primarily to predict total project duration?