PMP quest to solve

Submitted by amber on Fri, 10/12/2012 - 19:14

 Ques: You are a project manager for Waterways Houseboats, Inc. You’ve been asked to perform a

cost-benefit analysis for two proposed projects. Project A costs $2.4 million, with potential
benefits of $12 million and future operating costs of $3 million. Project B costs $2.8 million,
with potential benefits of $14 million and future operating costs of $2 million. Which project
should you recommend?
A. Project A, because the cost to implement is cheaper than Project B
B. Project A, because the potential benefits plus the future operating costs are less in value
than the same calculation for Project B
C. Project B, because the potential benefits minus the implementation and future operating
costs are greater in value than the same calculation for Project A
D. Project B, because the potential benefits minus the costs to implement are greater in
value than the same calculation for Project A
 
Answer: C. Project B’s cost-benefit analysis is a $9.2 million benefit to the company, compared to

$6.6 million for Project A. Cost-benefit analysis takes into consideration the initial costs

to implement and future operating costs

How this answer has been derived can anyone explain logic pls. thanks

Quest: 50. What type of organization experiences the least amount of stress during project closeout?

A. Projectized

B. Functional

C. Weak matrix

D. Strong matrix

Answer is C but why ?

Forums: 
PMP / CAPM exam Question bank
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NewBeePM

Sat, 10/13/2012 - 03:47

Basically Ultimate Benefts = Benefits - (COST to implement + recurring/operational cost)

 

Benefits of Project A= 12 - (2.4+3) = 6.6

Benfits of project B = 14 - (2.8 + 2) = 9.2

 

The explanation above will then make sense.

sspawar

Sat, 10/13/2012 - 13:01

I think this question is based on this thought that which organization structure is more complex in nature during its run.


And thus after completion definitely they will feel more relax than others.


Projectized and Functional are 2 poles where no frustration.


Strong - little


Weak --- full of uncertainity, confusion, etcetraetcetra