PMP Practice Session

Introduction

• Practice exams are essential for PMP preparation.
• Focus on answering questions quickly and accurately.

Question 1: Benefit-Cost Ratio (BCR)

• Concept: BCR is the benefits of a project divided by its costs.
  • Higher ratio indicates better project.
  • Formula: ( BCR = \frac{Benefits}{Costs} )
• Example:
  • Project cost: $200,000
  • Benefit: $190,000
  • Calculation: ( \frac{190,000}{200,000} = 0.95 )
  • Answer: Option B (0.95)

Question 2: Soft Skills and Vendor Management

• Scenario: Vendor involved in a hostile takeover.
• Best Practice: Direct and collaborative approach.
  • Talk directly to the vendor to understand and manage risk.
  • Avoid ignoring, abrupt cessation, or indirect actions.
• Answer: Option C (Talk to the vendor directly)

Question 3: Project Selection using Net Present Value (NPV)

• Concept: Select project with highest NPV.
  • NPV considers the time value of money over the project's duration.
• Example:
  • Project X: 3 years, NPV = $101,000
  • Project Y: 2 years, NPV = $95,000
  • Choose Project X with higher NPV.
• Answer: Option B (Project X)

Question 4: Opportunity Cost

• Concept: Opportunity cost is the value of the project not selected.
• Example:
  • Choosing Project X over Project Y.
  • Opportunity cost = NPV of Project Y = $179,000
• Answer: Option B (Value of Project Y)

Question 5: Benefit-Cost Ratio Interpretation

• Concept: A BCR > 1 indicates benefits exceed costs.
  • BCR of 1.45 implies benefits are 1.45 times the costs.
• Clarification:
  • Revenue (benefits) vs Profit (after costs)
• Example:
  • Benefits (revenue) are 1.45 times the costs.
• Answer: Option D (Revenue 1.45 times the cost)

Conclusion

• Consistent practice helps in understanding and applying project management principles.
• Emphasize on direct and collaborative problem-solving.
• Keep practicing and reviewing PMP concepts to ensure success.